Book review: Sugata Marjit, Biswajit Mandal, and Noritsugu Nakanishi, Virtual Trade and Comparative Advantage: The Fourth Dimension
| Author | Lei Yang |
| DOI | http://doi.org/10.1177/00157325221119037 |
| Published date | 01 May 2023 |
| Date | 01 May 2023 |
| Subject Matter | Book Review |
Book Review
Sugata Marjit, Biswajit Mandal, and Noritsugu Nakanishi, Virtual
Trade and Comparative Advantage: The Fourth Dimension, Singapore:
Springer-Nature, 2020, €75.89, 207 pp.
With the fast development in communication technology, virtual markets,
exchange of goods and services have been playing a more and more important
role in the world in recent years. It is shown that the trade value of digitally
delivered services was changed from $1,855 billion in 2008 to $2,964 billion in
2018, increasing by about 60% (UNCTAD, 2015). Virtual trade has the growing
importance during the COVID-19 pandemic.
International trade has been explained in different dimensions, including
difference in technology, endowment, tastes as well as increasing return to scale
and firm heterogeneity. The impacts of time cost on virtual international trade has
not been explored deeply. The book by Marjit, Mandal and Nakanishi fills in this
gap by providing an attempt to analyse the new dimension of the comparative
advantage of international trade: the difference of time zones of the trading
partners. This book provides the first theoretical monograph on international trade
on virtual platform. Therefore, it is a timely contribution to the current literature.
This book has 14 chapters, including the introduction and the conclusion,
which shed light on the new dimension of the determinants of international virtual
trade. The introductory chapter underlines the important role of virtual trade and
set the context. Under this framework, the authors address that two identical
countries located in two non-overlapping time zones and working in a virtual
framework can engage in trade and win. Part II of this book discusses the
implications of virtual trade or time zone difference in different traditional trade
models. The authors first review some important existing literatures that study
the impacts of time zone on trade, factor markets, growth and empirical relevance
including Kikuchi (2009, 2011) and Marjit (2007). Then they study how virtual
trade or time zone difference can be incorporated into traditional trade models.
They start with the setting of the Ricardian model where two countries with the
same technology produce two products. One good has to be produced in two
vertically related stages and each stage requires one working day and the other
good does not have such requirement. There is no trade between these two
countries based on conventional wisdom since these two countries do not have
difference in technology. The authors show that there is increase in productivity
due to the time zone difference, which is a new avenue of trade. Next, the authors
Foreign Trade Review
58(2) 350–352, 2023
© 2022 Indian Institute of
Foreign Trade
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DOI: 10.1177/00157325221119037
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