Time Zones, Communications Networks, and International Trade

Advances in digital technology have driven large decreases in the costs of data transfer and telecommunications. There is a consequent increase in many kinds of international trade. One of the fastest-growing parts of this industry is "remote maintenance" whereby Indian companies debug software for companies in other parts of the world, often taking advantage of time zone differences to offer overnight service.

In the existing literature on trade theory, however, relatively few attempts have been made to address the theme of communications networks and the role of time zones. The main purpose of this book is to illustrate, with simple models of international trade, how the introduction of communications networks and the utilization of time zone differences can affect both the structure of international trade and world welfare. Other technological aspects of recent international trade (e.g., competition between international standards, the impact of switching costs on imported products’ introduction) are also examined.

Although a focus on theoretical trade models, the book will appeal to scholars, policy makers and business units who wish to learn from the recent changes in communications networks and its impact on the global economy. It provides information and suggestions for better policy formulation in the fast-changing world economy.

Toru Kikuchi is Professor of Economics at the Graduate School of Economics, Kobe University, Kobe, Japan. He began his study of economics at Otaru University of Commerce, Japan. After earning a Ph.D. in Economics from Kobe University, he began teaching at Kobe University at 1995 and was promoted to full Professor in 2009. He regularly teaches in both undergraduate and graduate courses in international economics.
His main research field is the theory of international trade under increasing returns and imperfect competition. Recently, his research has focused on the relationship between communications networks and time zone differences. His research papers have appeared in scholarly journals such as Canadian Journal of Economics, Economic Modelling, Japanese Economic Review, Journal of Economics, Manchester School, Open Economies Review, Review of Development Economics, and Review of International Economics.

1. Introduction Part I: Preliminaries 2. Basic Models of International Trade I 3. Basic Models of International Trade II 4. A Decomposition of the Home-Market Effect 5. Monopolistic Competition and Distribution of Trade Gains Part II: Communications Networks and Time Zones 6. Conutry-Specificity of Communications Networks 7. Interconnectivity of Communications Networks 8. Interconnected Communications Networks and Home Market Effects 9. Time Zones as a Source of Comparative Advantage 10. Service Trade with Time Zone Differences 11. Growth with Time Zone Differences Part III: Network Effects and Switching Costs 12. Direct Network Effects 13. Indirect Network Effects 14. Switching Costs 15. Foreign Brand Penetration Part VI: Cost Heterogeneity and Trade 16. Increasing Costs in Product Diversification 17. Efficiency Gaps and Heckscher-Ohlin Trade Pattern 18. Chamberlinian-Ricardian Trade Patterns 19. Strategic Export Policies 20. Concluding Remarks