The Effect of Trade Costs on the Foreign Trade Size: A Comparative Study of High-Income Countries and UpperMiddle-Income Countries
Abstract
In theories of microeconomics, exchange costs are not taken into account when discussing exchange benefits, and an implicit assumption is made that exchange costs are zero. On the other hand, in the traditional international economy, the cost of trade was not considered very carefully. However, in the modern economy, trade costs constitute a significant portion of global trade. Method: This article examined the effect of trade costs on trade volume in two groups, high-income, and upper-middle-income countries, over the period of 2006-2015 using the Panel data analysis method. Result: The results of the study show that transportation costs and the number of commercial documents have a negative effect on the trade volume in high-income countries. ConclusionIn: high-income countries, trade costs lead to a decrease in trade volume, while in upper-middle-income countries, transportation costs and the number of trade documents do not have a significant impact on trade volume.
The Effect of Trade Costs on the Foreign Trade Size: A Comparative Study of High-Income Countries and UpperMiddle-Income Countries
Abstract
In theories of microeconomics, exchange costs are not taken into account when discussing exchange benefits, and an implicit assumption is made that exchange costs are zero. On the other hand, in the traditional international economy, the cost of trade was not considered very carefully. However, in the modern economy, trade costs constitute a significant portion of global trade. Method: This article examined the effect of trade costs on trade volume in two groups, high-income, and upper-middle-income countries, over the period of 2006-2015 using the Panel data analysis method. Result: The results of the study show that transportation costs and the number of commercial documents have a negative effect on the trade volume in high-income countries. ConclusionIn: high-income countries, trade costs lead to a decrease in trade volume, while in upper-middle-income countries, transportation costs and the number of trade documents do not have a significant impact on trade volume.
Details
| Primary Language | English |
|---|---|
| Subjects | Economic Theory (Other) |
| Journal Section | Research Articles |
| Authors | |
| Publication Date | March 1, 2023 |
| Published in Issue | Year 2023 Volume: 27 Issue: 1 |
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