Rising trade costs? Agglomeration and trade with endogenous transaction costs

Gilles Duranton and Michael Storper ()
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Michael Storper: CSO - Centre de sociologie des organisations (Sciences Po, CNRS) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique

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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.

Date: 2008-02
Note: View the original document on HAL open archive server: https://hal-sciencespo.archives-ouvertes.fr/hal-03415826
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Published in Canadian Journal of Economics / Revue Canadienne d'Économique, 2008, 41 (1), pp.292 - 319. ⟨10.1111/j.1365-2966.2008.00464.x⟩

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Related works:
Journal Article: Rising trade costs? Agglomeration and trade with endogenous transaction costs (2008)
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 (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)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-03415826

DOI: 10.1111/j.1365-2966.2008.00464.x

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