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Terence Chong
''Network externalities as a source of comparative advantage''
( 2005, Vol. 6 No.7 )
This note examines how the network externalities of communications activities and trading opportunities interact to determine the structure of comparative advantage between countries. These interactions are obtained by constructing a two-country, two-sector model of trade involving a communications network sector. The role of network interconnectivity, which allows users of a network to communicate with users of another network, is also explored. A comparative advantage in the good that requires network services is held by the countries with interconnected networks.
Keywords: network externalities: interconnectivity: comparative advantage
JEL: F1 - Trade: General
L1 - Market Structure, Firm Strategy, and Market Performance: General
Manuscript Received : May 29 2005 Manuscript Accepted : Jun 01 2005

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