When comparative advantage is not enough:business costs in small remote economies

Winters, L Alan and Martins, Pedro M G (2004) When comparative advantage is not enough:business costs in small remote economies. World Trade Review, 3 (3). pp. 347-383. ISSN 1474-7456

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Abstract

This paper uses a newly collected dataset on business costs to investigate empirically whether small and remote economies are inherently uncompetitive. Although in theory these economies can overcome their small size by specialising and trading, this may not be enough to generate acceptable incomes because they face a combination of diseconomies of small scale and high transaction costs. We conclude that there are almost certainly some very small economies for which this is true. These economies are likely to become less attractive for commercial activities as globalization proceeds and their current trade preferences are eroded. The policy solution is not protection, however, but proactive policies from the international community.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Economics
Depositing User: L.Alan Winters
Date Deposited: 06 Feb 2012 20:01
Last Modified: 28 Mar 2012 08:46
URI: http://sro.sussex.ac.uk/id/eprint/23614
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