Customs-Related Transaction Costs, Firm Size and International Trade Intensity

Ernst Verwaal

Research output: Contribution to journalArticlepeer-review

26 Citations (Scopus)

Abstract

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.
Original languageEnglish
Pages (from-to)257-271
Number of pages15
JournalSmall Business Economics
Volume21 (3)
Issue number3
DOIs
Publication statusPublished - Nov 2003

ASJC Scopus subject areas

  • Economics and Econometrics

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