Groot, Henri L.F. De; Linders, Gert-Jan; Rietveld, Piet; … - European Regional Science Association - 2003
start from a standard gravity equation that incorporates variables for geographical proximity, common language, trade policy … transportation costs alone. This has become known as the ?mystery of the missing trade?. Transaction costs may be responsible for … ?under-trading? across national borders. More specifically, the relatively low intensity of foreign trade may reflect the …