Customs-Related Transaction Costs, Firm Size and International Trade Intensity
Customs are generally perceived as a time-consuming impediment to international trade. However, few studies have empirically examined the determinants and the impact of this type of government-imposed transaction costs. This paper analyses the role of firm size as a determinant of customs-related transaction costs, as well as the effect of firm size on the relationship between these costs and the international trade intensity of firms. The results of this study indicate that customs-related transaction costs repress international trade activities of firms, even at low levels of these costs. The paper identifies transaction-related economies of scale, simplified customs procedures and advanced information and communication technology as main determinants of customs-related transaction costs. It is shown that when these factors are taken into account, firm size has no effect on customs-related transaction costs. Policy implications are considered for firm strategy and public policy.
|firm size, international business strategy, international trade intensity, trade barriers|
|Statistical Decision Theory; Operations Research (jel C44), Models of Trade with Imperfect Competition and Scale Economies (jel F12), Firm (jel H32), Business Administration and Business Economics; Marketing; Accounting (jel M), Marketing (jel M31)|
|ERIM Top-Core Articles|
|Small Business Economics: an entrepreneurship journal|
|Organisation||Erasmus Research Institute of Management|
Verwaal, E, & Donkers, A.C.D. (2003). Customs-Related Transaction Costs, Firm Size and International Trade Intensity. Small Business Economics: an entrepreneurship journal, 257–271. doi:1025702520091