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Journal of Economic Integration 2006 December;21(4) :708-735.
Trade, Infrastructure and Transaction Costs: The Imperatives for Asian Economic Cooperation

Prabir De 

Research and Information System for Developing Countries (RIS)
Copyright ©2006 Journal of Economic Integration

Recent literature has emphasized the importance of transaction costs and infrastructure in explaining trade, access to markets, and regional cooperation under globalization. For most Asian countries, transaction costs are a greater barrier to trade integration than import tariffs. By estimating a structural model of economic geography using cross-country data on income, infrastructure, transaction costs and trade of selected Asian economies, this paper shows that the transaction costs is statistically significant and important determinant in explaining variation in trade in Asia.

JEL classification: F02, F10, F15

Keywords: Asia | Gravity Model | Infrastructure | Transaction Costs | Trade
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