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Rising trade costs?: agglomeration and trade with endogenous transaction costs

Duranton, Gilles and Storper, Michael (2008) Rising trade costs?: agglomeration and trade with endogenous transaction costs. Canadian Journal of Economics, 41 (1). pp. 292-319. ISSN 1540-5982

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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.

Item Type: Article
Official URL: http://economics.ca/cje/
Additional Information: © 2008 Canadian Economics Association
Library of Congress subject classification: H Social Sciences > HF Commerce
Sets: Departments > Geography and Environment
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 31 Jan 2011 15:42
URL: http://eprints.lse.ac.uk/31926/

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