Intraindustry trade in intermediate goods
- 72 Downloads
Since intermediate goods play such a vital role in foreign trade, this paper develops a model that explains the benefits from intraindustry trade in differentiated intermediate goods. In comparison with a situation of autarchy, this type of trade causes an increase in the number of intermediate good varieties. In this way, the producers of final goods will benefit from intermediate good varieties, which are closer to the ideal for a specific production process. At the same time, the producers of intermediate goods will, under conditions of international division of labor, benefit from economies of scale.
KeywordsEconomic Growth Production Process Vital Role International Economic Specific Production
Unable to display preview. Download preview PDF.
- Dixit, Avinash; Stiglitz, Joseph. "Monpolistic Competition and Optimum Product Variety,"American Economic Review, 67, 1977, pp. 297–308.Google Scholar
- Ethier, Wilfred J. "Internationally Decreasing Costs and World Trade,"Journal of International Economics, 9, 1979, pp. 1–24.Google Scholar
- __. "National and International Returns to Scale in the Modern Theory of International Trade,"The American Economic Review, 72, 3, 1982, pp. 389–405.Google Scholar
- Greenaway, D.; Torstensson, J. "Back to the Future: Taking Stock on Intra-Industry Trade,"Weltwirtschaftliches Archiv, 133, 2, 1997, pp. 249–69.Google Scholar
- Greenaway, David; Milner, Chris R. "Intra-Industry Trade: Current Perspectives and Unresolved Issues,"Weltwirtschaftliches Archiv, 123, 1, 1987, pp. 39–57.Google Scholar
- Grubel, H. G.; Lloyd, P. J.Intra-Industry Trade: The Theory and Measurement of International Trade in Differentiated Products, London, United Kingdom: MacMillan, 1975.Google Scholar
- Helpman, Elhanan. "International Trade,"Journal of International Economics, 11, 1981, pp. 341–59.Google Scholar
- Helpman, Elhanan; Krugman, Paul.Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition and the International Economy, Cambridge, MA: MIT Press, 1985.Google Scholar
- Lancaster, Kelvin. "A New Approach to Consumer Theory,"Journal of Political Economy, 74, 1966, pp. 132–57.Google Scholar
- __.Variety, Equity, and Efficiency, New York, NY: Columbia University Press, 1979.Google Scholar
- Lüthje, Teit.Foreign Trade in Intermediate Goods, Kolding, Denmark: University of Southern Denmark, 2000.Google Scholar