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External Economies in the International Trade Theory: A Survey

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  • Jai–Young Choi
  • Eden S. H. Yu

Abstract

The paper surveys the international trade literature on intraindustrial and interindustrial production externalities. It places particular emphasis upon the literature on variable returns to scale (VRS) developed along the Kemp line that the externalities are output–generated, and the economies of scale are external (internal) to individual firms (industry). The discussion touches upon the literature examining the implications of VRS for fundamental trade theorems, trade policies, economic growth, and welfare. The paper extends the survey to writings on the Meade–type interindustrial production externalities.

Suggested Citation

  • Jai–Young Choi & Eden S. H. Yu, 2002. "External Economies in the International Trade Theory: A Survey," Review of International Economics, Wiley Blackwell, vol. 10(4), pages 708-728, November.
    • Handle: RePEc:bla:reviec:v:10:y:2002:i:4:p:708-728
    DOI: 10.1111/1467-9396.t01-1-00360
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    Cited by:

    1. Siddhartha Bandyopadhyay & Arijit Mukherjee, 2014. "R&D Cooperation with Entry," Manchester School, University of Manchester, vol. 82(1), pages 52-70, January.
    2. Jonathan Temple, 2005. "Dual Economy Models: A Primer For Growth Economists," Manchester School, University of Manchester, vol. 73(4), pages 435-478, July.
    3. Matthias Wrede, 2014. "Agglomeration, tax competition, and fiscal equalization," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(6), pages 1012-1027, December.
    4. Vassilis T. Rapanos, 2005. "Minimum Wage And Income Distribution In The Harris-Todaro Model," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 30(1), pages 1-14, June.
    5. Gene M. Grossman & Esteban Rossi-Hansberg, 2010. "External Economies and International Trade Redux," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(2), pages 829-858.
    6. Dmytro Kylymnyuk & Lilia Maliar & Serguei Maliar, 2007. "A model of unbalanced sectorial growth with application to transition economies," Economic Change and Restructuring, Springer, vol. 40(4), pages 309-325, December.
    7. Kylymnyuk Dmytro & Maliar Lilia & Maliar Serguei, 2007. "Rich, Poor and Growth-Miracle Nations: Multiple Equilibria Revisited," The B.E. Journal of Macroeconomics, De Gruyter, vol. 7(1), pages 1-44, August.

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