Why Do Trade Costs Vary?

Richard Pomfret and Patricia Sourdin ()
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Patricia Sourdin: School of Economics, University of Adelaide

No 2008-08, Adelaide Economics Working Papers from Adelaide University, School of Economics

Abstract: Trade theorists and policymakers have until recently ignored trade costs, but as tariffs have fallen it is apparent that trade costs are a significant obstacle to trade and they are not simply determined by geography or commodity characteristics. We analyse country-by-country variations in trade costs using disaggregated Australian import data. In Australia average trade costs are about 5% of the value of imports, compared to an average tariff of under 4%. Controlling for distance from Australia and the bulkiness of commodities, the paper examines other determinants of international trade costs in terms of exporting country characteristics. Country-specific characteristics which influence the size of trade costs may provide a direct link between institutions and economic growth.

Pages: 40 pages
Date: 2008
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (13)

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Related works:
Journal Article: Why do trade costs vary? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:adl:wpaper:2008-08

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