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Time Zones, Outsourcing and Patterns of International Trade

Author

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  • Toru Kikuchi

    (Kobe University)

Abstract

This paper proposes a three-country model of business services trade that captures the role of time zones in the division of labor. The connectivity of business service sectors via communications networks (e.g., the Internet) is found to determine the structure of comparative advantage. That is, two countries with connected service sectors have a comparative advantage in the good that requires business services. It is also shown that the third country inevitably specializes in the good that does not require business services.

Suggested Citation

  • Toru Kikuchi, 2006. "Time Zones, Outsourcing and Patterns of International Trade," Economics Bulletin, AccessEcon, vol. 6(15), pages 1-10.
    • Handle: RePEc:ebl:ecbull:eb-06f10018
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    File URL: http://www.accessecon.com/pubs/EB/2006/Volume6/EB-06F10018A.pdf
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    References listed on IDEAS

    as
    1. Toru Kikuchi, 2003. "Interconnectivity of communications networks and international trade," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 155-167, February.
    2. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Elisabeth Christen, 2017. "Time Zones Matter: The Impact of Distance and Time Zones on Services Trade," The World Economy, Wiley Blackwell, vol. 40(3), pages 612-631, March.
    2. Kikuchi, Toru & Iwasa, Kazumichi, 2010. "A simple model of service trade with time zone differences," International Review of Economics & Finance, Elsevier, vol. 19(1), pages 75-80, January.
    3. Rebecca Tomasik, 2013. "Time zone-related continuity and synchronization effects on bilateral trade flows," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(2), pages 321-342, June.
    4. Biswajit Mandal & Sujata Ghosh, 2020. "Communication Cost, Skilled-Unskilled Wage, and Informality," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 18(4), pages 927-939, December.
    5. Noritsugu Nakanishi & Ngo Van Long, 2020. "A new impetus for endogenous growth: R&D offshoring via virtual labor mobility," Review of International Economics, Wiley Blackwell, vol. 28(3), pages 846-883, August.
    6. Alaka Shree Prasad & Biswajit Mandal, 2019. "Time zone difference, skill formation and corrupt informal sector: the role of virtual trade," Indian Economic Review, Springer, vol. 54(2), pages 261-290, December.
    7. Mandal, Biswajit & Prasad, Alaka Shree, 2018. "Time Zone Differences, Communication Cost and Service Trade," MPRA Paper 87465, University Library of Munich, Germany.
    8. Egger, Peter H. & Larch, Mario, 2013. "Time zone differences as trade barriers," Economics Letters, Elsevier, vol. 119(2), pages 172-175.
    9. Noritsugu Nakanishi & Ngo Van Long, 2015. "The Distributional and Allocative Impacts of Virtual Labor Mobility across Time Zones through Communication Networks," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 638-662, August.
    10. Prasad, Alaka Shree & Mandal, Biswajit, 2019. "Virtual trade between different time zones, educational capital and corrupt informal sector," MPRA Paper 96963, University Library of Munich, Germany.
    11. Jelnov, Pavel, 2021. "Sunset Long Shadows: Time, Crime, and Perception of Change," IZA Discussion Papers 14770, Institute of Labor Economics (IZA).
    12. Biswajit Mandal & Alaka Shree Prasad, 2020. "A simple model of time zone differences, virtual trade and informality," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 14(1), pages 81-96, June.
    13. Matsuoka, Yuji & Fukushima, Marcelo, 2010. "Time zones, shift working and international outsourcing," International Review of Economics & Finance, Elsevier, vol. 19(4), pages 769-778, October.

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    JEL classification:

    • F1 - International Economics - - Trade
    • F1 - International Economics - - Trade

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