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Trade Patterns and Policies : Intra-Industry Trade and Foreign Direct Investment

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Title: Trade Patterns and Policies : Intra-Industry Trade and Foreign Direct Investment
Authors: Ono, Hiroshi Browse this author
Kurata, Hiroshi Browse this author
Keywords: Intra-industry trade
Multinational firms
Wage differentials
Market size
Trade costs
Trade policies
Issue Date: 2006
Publisher: Graduate School of Economics and Business Administration, Hokkaido University
Journal Title: Economic Journal of Hokkaido University
Volume: 35
Start Page: 1
End Page: 17
Abstract: This paper investigates the patterns of trade and effects of trade policies in a manufacturing industry whose market is monopolistically competitive. Solving the equilibrium solutions explicitly, we show the existence of relative fixed costs, which divide patterns of trade into either a regime with intra-industry trade or active multinational firms. Moreover, it is found that both intra-industry trade and activities by multinational firms are determined by wage differentials, market size, trade costs and relative fixed costs. Thus, politically changing any of these factors may affect both trade patterns and intra-industry trade or multinational activities. (JEL F23, F11)
Type: bulletin (article)
Appears in Collections:Economic Journal of Hokkaido University > Vol. 35

Submitter: 小野 浩

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