Infrastructure Development, Comparative Advantage and Missing Trade

  • Rajat Acharyya


Whether infrastructure development facilitates trade by establishing comparative advantage in a wider set of goods is examined in an extended continuum of goods Ricardian model as developed by Dornbusch, Fisher and Samuelson (1977). When infrastructure development is financed through income tax collection, more goods are traded and the export basket of at least one country becomes more diversified. But if it is financed by tariff proceeds, increased volume of trade and diversified export baskets are not certain outcomes.


Home Country Transport Cost Infrastructure Development Relative Wage Wage Bill 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. Clark, X., Dollar, D., & Micco, A. (2004). Port efficiency, maritime transport costs and bilateral trade. NBER working paper 10353.Google Scholar
  2. Dornbusch, R., Fisher, S., & Samuelson, P. (1977). Comparative advantage, trade and payments in a Ricardian model with continuum of goods. American Economic Review, 47, 823–839.Google Scholar
  3. Francois, J., & Manchin, M. (2007). Institutions, infrastructure and trade. World Bank Policy research working paper 4152, March.Google Scholar
  4. Laussel, D., & Riezman, R. (2008). Fixed transport cost and international trade. In S. Marjit & E. Yu (Eds.), Contemporary and emerging issues in trade theory and policy (Frontiers of economics and globalization, Vol. 4). UK: Emerald.Google Scholar
  5. Limão, N., & Venables, A. J. (2001). Infrastructure, geographical disadvantage, transport costs and trade. World Bank Economic Review, 15, 451–479.CrossRefGoogle Scholar
  6. Martinez-Zarzoso, I., & Suarez-Burguet, C. (2005). Transport costs and trade: empirical evidence for Latin American imports from the European union. The Journal of International Trade & Economic Development, 14(3), 353–371.CrossRefGoogle Scholar
  7. UNCTAD (2003a). Development of multimodal transport and logistics services. Report by the UNCTAD Secretariat, TD/B/COM.3/EM.20/2.Google Scholar
  8. UNCTAD (2003b). Review of Maritime Transport, 2003. Geneva: UNCTAD.Google Scholar
  9. Wilson, J.S., Mann, C.L., & Otsuki, T. (2004). Assessing the potential benefit of trade facilitation: a global perspective. World Bank working paper no. WPS 3224.Google Scholar
  10. World Bank (2004). World Development Report.Google Scholar

Copyright information

© Springer India 2014

Authors and Affiliations

  1. 1.Department of EconomicsJadavpur UniversityKolkataIndia

Personalised recommendations