The capital value of the search for trading matches
preprintposted on 06.08.2009, 10:02 authored by Huw EdwardsHuw Edwards
This note explores the value of search capital in interim matches in the outsourcing trade, by extending Rauch and Casella s (2003) framework to a dynamic model of matching and searching. On provisional calculations, the sunken cost of this search imposes a similar order of magnitude trade barrier to most tariffs, and would be expected to affect both the intensive and extensive margins of trade.
- Business and Economics