Comparative Advantage in Digital Trade

Alan Deardorff

No 664, Working Papers from Research Seminar in International Economics, University of Michigan

Abstract: Digital trade takes a variety of forms, several of which are examined here with regard to whether they can be explained by comparative advantage. The five forms of digital trade considered are 1) physical products that are advertised, ordered, and/or paid for digitally, but transported by normal trade means; 2) digital products (music, movies, books, software) that are transmitted to purchasers via the internet and are most likely to be marketed and paid for via that as well; 3) services that are provided remotely by digital means; 4) data storage and computer applications accessible in the ÒcloudÓ; and 5) web platforms that serve an international audience and are supported by advertising. I argue that the first three of these can be well explained by comparative advantage, but there are problems with the last two.

Keywords: digital trade; comparative advantage (search for similar items in EconPapers)
JEL-codes: F1 F11 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2017-11-13
New Economics Papers: this item is included in nep-int and nep-pay
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