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Trade With Time Zone Differences: Factor Market Implications

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Executive Summary

The main purpose of this paper is to illustrate, with a simple two-factor (skilled labor and unskilled labor) trade model, how a time-saving improvement in business-services trade benefitting from differences in time zones can have an impact on national factor markets. For these purposes, the authors extend Marjit's (2007) framework into the case with the night-shift work. By doing so, they intend to capture the situation where the night-shift work in one country is replaced by the day-shift work in another country. In other words, they will show that, trade with time zone differences will result in shifts of the relative supplies and demands for skilled labor around the globe.

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