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Time Zones as a Source of Comparative Advantage

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  • Toru Kikuchi

Abstract

This note proposes a three‐country model of monopolistic competition 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, satellite communications systems) 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 unconnected country inevitably specializes in the good that does not require business services.

Suggested Citation

  • Toru Kikuchi, 2009. "Time Zones as a Source of Comparative Advantage," Review of International Economics, Wiley Blackwell, vol. 17(5), pages 961-968, November.
    • Handle: RePEc:bla:reviec:v:17:y:2009:i:5:p:961-968
    DOI: 10.1111/j.1467-9396.2009.00811.x
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    References listed on IDEAS

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    1. Van Long, Ngo & Riezman, Raymond & Soubeyran, Antoine, 2005. "Fragmentation and services," The North American Journal of Economics and Finance, Elsevier, vol. 16(1), pages 137-152, March.
    2. Markusen, James R, 1989. "Trade in Producer Services and in Other Specialized Intermediate Inputs," American Economic Review, American Economic Association, vol. 79(1), pages 85-95, March.
    3. Marjit, Sugata, 2007. "Trade theory and the role of time zones," International Review of Economics & Finance, Elsevier, vol. 16(2), pages 153-160.
    4. Richard G. Harris, 1995. "Trade and Communication Costs," Canadian Journal of Economics, Canadian Economics Association, vol. 28(s1), pages 46-75, November.
    5. 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.
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    Cited by:

    1. Matsuoka, Yuji & Fukushima, Marcelo, 2009. "Time Zones, Shift Working and Outsourcing through Communications Networks," MPRA Paper 13355, University Library of Munich, Germany.
    2. Toru Kikuchi & Sugata Marjit, 2010. "Time Zones and Periodic Intra-Industry Trade," EERI Research Paper Series EERI_RP_2010_08, Economics and Econometrics Research Institute (EERI), Brussels.
    3. Mandal, Biswajit, 2015. "Distance, production, virtual trade and growth: A note," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 9, pages 1-12.
    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. Hyunbae Chun & Jung Hur & Nyeong Seon Son & Haeyeon Yoon, 2019. "Do Non‐exporting Plants Benefit from Exporting Peer Plants?," Asian Economic Journal, East Asian Economic Association, vol. 33(3), pages 221-234, September.
    7. Mandal, Biswajit & Prasad, Alaka Shree & Bhattacharjee, Prasun, 2017. "A Review of Literature on Time Zone Difference and Trade," MPRA Paper 78779, University Library of Munich, Germany.
    8. 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.
    9. 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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