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ICT: Trade in services and small countries

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  • Nordas, Hildegunn

Abstract

This paper discusses how ICT-enabled trade in services such as education, entertainment and health affects their quality in small economies with shallow domestic markets. Consumer services need to be provided locally, but some of the content can be digitised and transmitted over long distances. A general equilibrium model of two asymmetric countries is developed and numerical simulations presented. Trade broadens the variety of content in the small country, but variety may be reduced in the large country due to fixed cost of entering foreign markets. Trade leads to a more equal distribution of income both between the small and the large country and within the small country.

Suggested Citation

  • Nordas, Hildegunn, 2005. "ICT: Trade in services and small countries," Conference papers 330234, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:330234
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    File URL: https://ageconsearch.umn.edu/record/330234/files/2101_Nordas.pdf
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    References listed on IDEAS

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    1. Anthony Venables, 1994. "Integration and the export behaviour of firms: Trade costs, trade volumes and welfare," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(1), pages 118-132, March.
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