英文摘要
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In the classical theory of international trade, transport costs are regarded as trade barriers. Therefore, a reduction in transport costs, arising from technological progress, will increase the volume of trade. In this paper, we show that the conventional view may not hold, if the transport industry uses domestic resources. More specifically, if the factor intensity of the transport sector is closely similar to that of the import sector, then transport-cost savings will induce the volume of trade to decline. This is because factors that are released from the transport sector due to its improving technology will enlarge the output of the import sector and reduce the output of the export sector, which in turn will make the trade volume decline.
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