The capital value of the search for trading matches

Terence Edwards

Discussion Paper Series from Department of Economics, Loughborough University

Abstract: This note explores the value of search capital in interfirm matches in the outsourcing trade, by extending Rauch and Casella's (2003) framework to a dynamic model of matching and searching. On provisional calculations, the sunken cost of this search imposes a similar order of magnitude trade barrier to most tariffs, and would be expected to affect both the intensive and extensive margins of trade.

Keywords: Trade; search; matching; capital (search for similar items in EconPapers)
JEL-codes: F00 F12 F13 (search for similar items in EconPapers)
Date: 2009-07, Revised 2009-07
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Citations: View citations in EconPapers (1)

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