Rising trade costs? Agglomeration and trade with endogenous transaction costs

Gilles Duranton and Michael Storper

Canadian Journal of Economics/Revue canadienne d'économique, 2008, vol. 41, issue 1, 292-319

Abstract: Abstract. While transport costs have fallen, the empirical evidence also points at rising total trade costs. In a model of industry location with endogenous transaction costs that seeks to replicate features from the machinery industry, we show how and under which conditions a decline in transport costs can lead to an increase in the total cost of trade. The subtle relationship between (endogenous) transport costs and the sensitivity of trade to distance is also explored. Alors que les coûts de transport ont chuté, les résultats empiriques montrent que les coûts totaux de transaction sont en hausse. A l'aide d'un modèle de localisation industrielle avec coûts de transaction endogènes qui tente d'approximer les caractéristiques de l'industrie de la machinerie, on montre comment et dans quelles conditions une chute des coûts de transport peut entraîner un accroissement des les coûts totaux de transaction. On explore aussi la relation subtile entre les coûts de transport (endogènes) et la sensibilité des flux de commerce au facteur distance.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (42)

Downloads: (external link)
https://doi.org/10.1111/j.1365-2966.2008.00464.x

Related works:
Journal Article: Rising trade costs? Agglomeration and trade with endogenous transaction costs (2008)
Working Paper: Rising trade costs? Agglomeration and trade with endogenous transaction costs (2008)
Working Paper: Rising trade costs? Agglomeration and trade with endogenous transaction costs (2008)
Working Paper: Rising Trade Costs? Agglomeration and Trade with Endogenous Transaction Costs (2005)
Working Paper: Rising Trade Costs? Agglomeration and Trade with Endogenous Transaction Costs (2005)
Working Paper: Rising trade costs? Agglomeration and trade with endogenous transaction costs (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:canjec:v:41:y:2008:i:1:p:292-319

Access Statistics for this article

More articles in Canadian Journal of Economics/Revue canadienne d'économique from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().