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American Economic Review: Vol. 95 No. 1 (March 2005)
AER Volume. 95, Issue 1 |
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Distance, Time, and Specialization: Lean Retailing in General Equilibrium
Article Citation
Evans, Carolyn L., and
James Harrigan. 2005. "Distance, Time, and Specialization: Lean Retailing in General Equilibrium."
The American Economic Review,
95(1): 292-313.
DOI: 10.1257/0002828053828590
DOI: 10.1257/0002828053828590
Abstract
Transport time increases with distance traveled, and time is valuable. We show the implications of these facts for global specialization and trade: products where timely delivery is important will be produced near the source of final demand, where wages will be higher as a result. In the model, timely delivery is important because it allows retailers to respond to final demand fluctuations without holding costly inventories, and timely delivery is possible only from nearby locations. Using a unique dataset that allows us to measure the retail demand for timely delivery, we show that the sources of U.S. apparel imports have shifted in the way predicted by the model, with products for which timeliness matters increasingly imported from nearby countries.
Article Full-Text Access
Full-text Article
Additional Materials
Download Data Set (3.01 MB) | Link to Appendix (491.49 KB)
Authors
Evans, Carolyn L.
Harrigan, James
Harrigan, James

