Corpus ID: 201605421

Transaction Costs and the Pattern of International Trade

  title={Transaction Costs and the Pattern of International Trade},
  author={Dirk Holzhey},
  • Dirk Holzhey
  • Published 2003
  • Trade models featuring imperfect competition, increasing returns and transaction costs usually predict that the country with the larger home market will be the net exporter of manufacturing goods and the net importer of agricultural goods. This result is known as the ”home market effect”. However, virtually all these models do not care much about the specific characteristics of the transaction sector. The purpose of this paper is to close this gap. Based on Ottaviano et al. (2002), we introduce… CONTINUE READING

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