The pro-competitive gains from trade with variable markup and multiple factors

The paper investigates the welfare gains from trade liberalization in the presence of multiple factors, multiple industries and variable markup. We extend Bernard, Redding and Schott (2007) to incorporate variable markup, using additively separable utility. We then characterize the equilibrium un...

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Main Authors: Chen, Yongxiao, Li, Xinxin, Liu, Yaxin
Other Authors: Chen Xin
Format: Final Year Project
Language:English
Published: 2017
Subjects:
Online Access:http://hdl.handle.net/10356/69934
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Institution: Nanyang Technological University
Language: English
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spelling sg-ntu-dr.10356-699342019-12-10T11:57:37Z The pro-competitive gains from trade with variable markup and multiple factors Chen, Yongxiao Li, Xinxin Liu, Yaxin Chen Xin School of Humanities and Social Sciences Chen Xiaoping DRNTU::Humanities The paper investigates the welfare gains from trade liberalization in the presence of multiple factors, multiple industries and variable markup. We extend Bernard, Redding and Schott (2007) to incorporate variable markup, using additively separable utility. We then characterize the equilibrium under costly trade and discuss the welfare implications of Heckscher-Ohlin mechanism, as well as the variable markup. Our main nding is that gains from trade liberalization are higher in models with variable markup than those with constant markup when the Heckscher-Ohlin force is strong enough. The larger the trade cost decreases, the stronger the Heckscher-Ohlin force is. We conclude that the pro-competitive e ect of trade liberalization does exist in the presence of Heckscher-Ohlin comparative advantage and variable markup. Bachelor of Arts 2017-04-04T04:13:56Z 2017-04-04T04:13:56Z 2017 Final Year Project (FYP) http://hdl.handle.net/10356/69934 en Nanyang Technological University 39 p. application/pdf
institution Nanyang Technological University
building NTU Library
country Singapore
collection DR-NTU
language English
topic DRNTU::Humanities
spellingShingle DRNTU::Humanities
Chen, Yongxiao
Li, Xinxin
Liu, Yaxin
The pro-competitive gains from trade with variable markup and multiple factors
description The paper investigates the welfare gains from trade liberalization in the presence of multiple factors, multiple industries and variable markup. We extend Bernard, Redding and Schott (2007) to incorporate variable markup, using additively separable utility. We then characterize the equilibrium under costly trade and discuss the welfare implications of Heckscher-Ohlin mechanism, as well as the variable markup. Our main nding is that gains from trade liberalization are higher in models with variable markup than those with constant markup when the Heckscher-Ohlin force is strong enough. The larger the trade cost decreases, the stronger the Heckscher-Ohlin force is. We conclude that the pro-competitive e ect of trade liberalization does exist in the presence of Heckscher-Ohlin comparative advantage and variable markup.
author2 Chen Xin
author_facet Chen Xin
Chen, Yongxiao
Li, Xinxin
Liu, Yaxin
format Final Year Project
author Chen, Yongxiao
Li, Xinxin
Liu, Yaxin
author_sort Chen, Yongxiao
title The pro-competitive gains from trade with variable markup and multiple factors
title_short The pro-competitive gains from trade with variable markup and multiple factors
title_full The pro-competitive gains from trade with variable markup and multiple factors
title_fullStr The pro-competitive gains from trade with variable markup and multiple factors
title_full_unstemmed The pro-competitive gains from trade with variable markup and multiple factors
title_sort pro-competitive gains from trade with variable markup and multiple factors
publishDate 2017
url http://hdl.handle.net/10356/69934
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