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Agricultural Productivity, Business Services, and Comparative Advantage

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  • Toru Kikuchi

Abstract

By explicitly incorporating both the intermediate business service sector and non-homothetic preferences, this study develops a two-good (the agricultural good and the manufactured good) model of trade that captures the role of agricultural productivity, which deepens the division of labor in the manufactured good sector. The level of agricultural productivity is found to determine the structure of comparative advantage: the country that has an absolute advantage in the agricultural sector also has a comparative advantage in the manufactured good sector.

Suggested Citation

  • Toru Kikuchi, 2004. "Agricultural Productivity, Business Services, and Comparative Advantage," Open Economies Review, Springer, vol. 15(4), pages 375-383, October.
    • Handle: RePEc:kap:openec:v:15:y:2004:i:4:p:375-383
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    Cited by:

    1. Kamei, Keita & Sasaki, Hiroaki, 2014. "Is Agricultural Productivity Growth Good for Industrialization? Infrastructures and the Welfare Maximizing Tax Rate," MPRA Paper 53606, University Library of Munich, Germany.
    2. Keita Kamei & Hiroaki Sasaki, 2016. "Agricultural Productivity, Infrastructures and the Optimal Timing of Opening Trade," Manchester School, University of Manchester, vol. 84(5), pages 621-641, September.

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