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International Journal of Diplomacy and Economy


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International Journal of Diplomacy and Economy (1 paper in press)


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  • Transaction costs in international production and trade, and the demand for government intervention; a survey amongst entrepreneurs in the Netherlands   Order a copy of this article
    by Ebel Berghuis, Frank Den Butter 
    Abstract: Transaction costs play a major role in international trade and the internationalization of production with fragmented supply chains. A survey among companies in the manufacturing industry and services sector in the Netherlands provides insight into the relative importance of various types of transaction costs when organising production internationally. The survey also provides information about which forms of government interventions in order to reduce transaction costs are to be considered useful and appropriate by the respondents. These answers are confronted with arguments from the theory of public sector economics and of economic diplomacy to reduce transaction costs, for instance by internalising externalities, by promoting knowledge spill-overs and by providing infrastructure with the character of a public good. The survey shows that about half of the respondent companies assess government interventions as important. This assessment holds more or less true for all types of government interventions. rnrn
    Keywords: commercial policy,rnnontariff barriers; rnoutsourcing,rnmanaging transaction costs,rnsurvey analysis,rn economic diplomacy; rncountry branding,rnglobal value chains.