Publication
Dec 2002
This publication explores sunk costs in international trade. It shows that known trade barriers may have a stronger impact on trade flows than models suggest and therefore builds a model for sunk costs by allowing firms to invest in sales channels or marketing in order to increase demand in each market. The author derives some implications for the international trade patterns and generalizes the model in order to examine its relevance for the gravity relationship in international trade. Finally, he discusses implications and limitations of the model.
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English (PDF, 22 pages, 183 KB) |
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Author | Arne Melchior |
Series | NUPI Working Papers |
Issue | 634 |
Publisher | Norwegian Institute of International Affairs (NUPI) |
Copyright | © 2002 Norwegian Institute of International Affairs (NUPI) |