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Distance, production, virtual trade and growth: A note

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  • Mandal, Biswajit

Abstract

This paper argues that distance is not necessarily harmful to trade. It is shown that there may be an increase in the production and volume of trade if time zones of the trading nations are non-overlapping. This implies a positive effect of distance on the volume of trade in general and virtual trade in particular. It is also shown that exploitation of time zone differences raises welfare and ensures capital accumulation. The paper builds on the emerging literature on time zones and pure theory of international trade.

Suggested Citation

  • 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.
    • Handle: RePEc:zbw:ifweej:20151
    DOI: 10.5018/economics-ejournal.ja.2015-1
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    References listed on IDEAS

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    1. Head, Keith & Mayer, Thierry & Ries, John, 2009. "How remote is the offshoring threat?," European Economic Review, Elsevier, vol. 53(4), pages 429-444, May.
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    5. Fink, Carsten & Mattoo, Aaditya & Neagu, Ileana Cristina, 2005. "Assessing the impact of communication costs on international trade," Journal of International Economics, Elsevier, vol. 67(2), pages 428-445, December.
    6. Toru Kikuchi & Sugata Marjit & Biswajit Mandal, 2013. "Trade with Time Zone Differences: Factor Market Implications," Review of Development Economics, Wiley Blackwell, vol. 17(4), pages 699-711, November.
    7. Edward Anderson, 2014. "Time differences, communication and trade: longitude matters II," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(2), pages 337-369, May.
    8. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-1046, December.
    9. Falvey, Rodney E, 1976. "Transport Costs in the Pure Theory of International Trade," Economic Journal, Royal Economic Society, vol. 86(343), pages 536-550, September.
    10. Head, Keith & Mayer, Thierry & Ries, John, 2009. "How remote is the offshoring threat?," European Economic Review, Elsevier, vol. 53(4), pages 429-444, May.
    11. Toru Kikuchi, 2009. "Time Zones as a Source of Comparative Advantage," Review of International Economics, Wiley Blackwell, vol. 17(5), pages 961-968, November.
    12. James H. Cassing, 1978. "Transport Costs in International Trade Theory: A Comparison with the Analysis of Nontraded Goods," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 92(4), pages 535-550.
    13. repec:hal:spmain:info:hdl:2441/10144 is not listed on IDEAS
    14. Marjit, Sugata, 2007. "Trade theory and the role of time zones," International Review of Economics & Finance, Elsevier, vol. 16(2), pages 153-160.
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    Cited by:

    1. Mandal, Biswajit & Roy Chakraborty, Labani & Sanyal, Alapan, 2023. "A Hybrid Mode of Production, Transaction, and Economic Growth: Implication of Digitalization," MPRA Paper 116960, University Library of Munich, Germany.
    2. Sugata Marjit & Biswajit Mandal, 2017. "Virtual trade between separated time zones and growth," International Journal of Economic Theory, The International Society for Economic Theory, vol. 13(2), pages 171-183, June.
    3. Mandal, Biswajit & Das, Maitrayee, 2023. "Effects of Time Zone Related Distance on Trade: Goods vs. Service," MPRA Paper 118256, University Library of Munich, Germany.
    4. Mandal, Biswajit, 2024. "Digital Mobility of Financial Capital Across Different Time Zones, Factor Prices and Sectoral Composition," GLO Discussion Paper Series 1371, Global Labor Organization (GLO).
    5. 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.
    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. 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.
    9. Mandal, Biswajit & Das, Maitrayee, 2024. "Trade Variations Due to Distance and Delaying Costs across Time Zones," MPRA Paper 122608, University Library of Munich, Germany.
    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. Biswajit Mandal & Sugata Marjit & Noritsugu Nakanishi, 2018. "Outsourcing, factor prices and skill formation in countries with non-overlapping time zones," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 8(2), pages 289-304, August.
    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.

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    More about this item

    Keywords

    Trade; time zone;

    JEL classification:

    • F1 - International Economics - - Trade

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