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On Nations' Size and Transportation Costs

Author

Listed:
  • Shachmurove, Yochanan
  • Spiegel, Uriel

Abstract

This paper develops a noncooperative Nash model in which a closed border is opened to trade between countries that differ in size and transportation costs. The paper suggests an explanation as to why economists have not convinced policymakers to lift all barriers to free trade. The questions we pose are: Who will gain as a result of opening the borders? Is free trade beneficial to the two parties involved? Do they both share equally in the fruits of free trade? Which country, large or small, benefits most? It is shown that free trade is not beneficial to both countries. Copyright 1995 by Blackwell Publishing Ltd.

Suggested Citation

  • Shachmurove, Yochanan & Spiegel, Uriel, 1995. "On Nations' Size and Transportation Costs," Review of International Economics, Wiley Blackwell, vol. 3(2), pages 235-243, June.
    • Handle: RePEc:bla:reviec:v:3:y:1995:i:2:p:235-43
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    Citations

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    Cited by:

    1. Tharakan, Joe & Thisse, Jacques-Francois, 2002. "The importance of being small. Or when countries are areas and not points," Regional Science and Urban Economics, Elsevier, vol. 32(3), pages 381-408, May.
    2. Egger, Hartmut & Egger, Peter, 2007. "Outsourcing and trade in a spatial world," Journal of Urban Economics, Elsevier, vol. 62(3), pages 441-470, November.
    3. Gori, Giuseppe Francesco & Lambertini, Luca, 2013. "Trade liberalisation between asymmetric countries with environmentally concerned consumers," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 549-560.
    4. Tharakan, J., 2001. "Revisiting “On nations’ size and transportation costs”," LIDAM Discussion Papers CORE 2001032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Yochanan Shachmurove & Uriel Spiegel, 2004. "Size Does Matter: International Trade and Population Size," PIER Working Paper Archive 04-035, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    6. Mario Marazzi, 2002. "On the fragility of gains from trade under continuously differentiated bertrand competition," International Finance Discussion Papers 735, Board of Governors of the Federal Reserve System (U.S.).
    7. Egger, Hartmut & Egger, Peter, 2010. "The trade and welfare effects of mergers in space," Regional Science and Urban Economics, Elsevier, vol. 40(4), pages 210-220, July.
    8. THARAKAN, Joe & THISSE, Jacques-François, 2000. "The importance of being small : size effects in international trade," LIDAM Discussion Papers CORE 2000001, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    9. Yochanan Shachmurove & Tikva Leker, "undated". ""The Effects of Immigration on Socioeconomic Gaps in Labor Managed System Versus in a Competitive System''," CARESS Working Papres 98-04, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
    10. Emanuel Shachmurove & Yochanan Shachmurove, 2010. "Location, Location, Location: Entrepreneurial Finance Meets Economic Geography," PIER Working Paper Archive 10-030, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    11. Octave Keutiben, 2018. "Exhaustible resources flows in a spatial context," Letters in Spatial and Resource Sciences, Springer, vol. 11(1), pages 71-83, March.
    12. Shachmurove, Yochanan, 1999. "The Premium in Black Foreign Exchange Markets: Evidence from Developing Economies," Journal of Policy Modeling, Elsevier, vol. 21(1), pages 1-39, January.

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