| Assessing the Impact of Communication Costs on International Trade (2007) | |||||||||||||||
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| Abstract: Communication costs are frequently cited as an important determinant of trade costs, but without any supporting empirical evidence. We test this relationship by incorporating alternative measures of communication costs in a model of bilateral trade. We find that international variations in communication costs indeed have a significant influence on trade patterns. Furthermore, estimates using disaggregated data reveal that the impact of communication costs on trade in differentiated products is larger than on trade in homogenous products- by as much as one-third. JEL Classification: F10 | |||||||||||||||
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