Scale Economies and International Trade in a Rapidly Growing Region
Scale is universally acknowledged as important in the determination of national comparative advantage. Paradoxically, attempts to associate empiri - cal measures of scale economies and international trade volume have proved largely inconclusive, and often have been found to sport the “wrong” sign. We examine the trade-scale nexus in the context of East Asian NICs and “Next- Tier” NICs whose economies and exports have grown especially rapidly since the mid-1960s. In a cross section context we replicate the negative correlations typically found in the literature. By combining time section and cross section analyses we demonstrate significant positive correlations in a dynamic context, finding that the smaller the country the greater the scale economy gains for any given population increase.
Year of publication: |
1997
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Authors: | L. David, Byron ; H. Kellman, Mitchell |
Published in: |
Journal of Economic Integration. - Department of Economics and Trade. - Vol. 12.1997, p. 26-46
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Publisher: |
Department of Economics and Trade |
Subject: | Scale | Economies |
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