Cross-Country Technological Differences as a Determinant of Vertical Intra-Industry Trade: a Theoretical Model
Vertical intra-industry trade accounts for a large share of trade between countries characterized by similar factor endowments. Moreover, it is observed even at a very disaggregated level of statistical classifications, suggesting that the traded products have similar factor intensities. This paper aims at modelling trade in vertically differentiated goods that are produced with the same factor intensity at any given factor prices ratio. In a neoclassical setting including three goods and two factors, we allow for Hicks-neutral technological differences across countries and we show that vertical intra-industry trade can be driven by these differences in technology.
In order to set up a list of libraries that you have access to,
you must first login
or sign up.
Then set up a personal list of libraries from your profile page by
clicking on your user name at the top right of any screen.