To see how this influences trade, consider the business of making disk drives for computers. Most of the world's disk-drive manufacturing is concentrated in South-east Asia. This is possible only because disk drives, while valuable, are small and light and so cost little to ship. Computer manufacturers in Japan or Texas will not face hugely bigger freight bills if they import drives from Singapore rather than purchasing them on the domestic market. Distance therefore poses no obstacle to the globalisation of the disk-drive industry.
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