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Taking the measure of things: the role of measurement in EU trade

Author

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  • M. Choudhary
  • Paul Temple
  • Lei Zhao

Abstract

In this paper theoretical and empirical models of intra-industry trade are developed in which economic activities, based on measurement and an associated measurement infrastructure, play a role in creating product variety. The paper discusses how the measurement infrastructure which includes institutions conducting metrological research and standard setting organization reduces transactions costs, especially in markets where differences in product characteristics are important. The theoretical analysis focuses on the public good characteristics of the measurement infrastructure, considering how the infrastructure impacts upon trade in a model based upon product differentiation under monopolistic competition. In the econometric analysis, indicators of the strength of the infrastructure within the EU, both across industries and across countries, suggest that measurement activities are important in determining the extent of bi-lateral EU intra-industry trade. Despite many common elements in the measurement infrastructure across the EU, there is also some evidence of differential access to the infrastructure among EU members. Copyright Springer Science+Business Media, LLC. 2013

Suggested Citation

  • M. Choudhary & Paul Temple & Lei Zhao, 2013. "Taking the measure of things: the role of measurement in EU trade," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 40(1), pages 75-109, February.
    • Handle: RePEc:kap:empiri:v:40:y:2013:i:1:p:75-109
    DOI: 10.1007/s10663-011-9178-z
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    Cited by:

    1. Link, Albert, 2021. "The Economics of Metrology," UNCG Economics Working Papers 21-1, University of North Carolina at Greensboro, Department of Economics.
    2. Michael J. Hall & Albert N. Link & Matthew Schaffer, 2022. "An economic analysis of standard reference materials," The Journal of Technology Transfer, Springer, vol. 47(6), pages 1847-1860, December.
    3. Christopher Spencer & Paul Temple, 2016. "Standards, learning, and growth in Britain, 1901–2009," Economic History Review, Economic History Society, vol. 69(2), pages 627-652, May.
    4. Christopher Spencer & Paul Temple, 2012. "Alternative Paths of Learning: Standardisation and Growth in Britain, 1901-2009," Discussion Paper Series 2012_10, Department of Economics, Loughborough University, revised Oct 2012.

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    More about this item

    Keywords

    Intra-industry trade; Product differentiation; Measurement; Standards; F12; F14; F15; L1; L60;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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