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International production, technology diffusion, and trade

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  • Serge Shikher

Abstract

The paper develops a general equilibrium model of international production and trade. Technology is carried across borders by multinational producers and the set of technologies being used in a particular country is endogenous. Production locations are chosen based on the costs of production and getting the product to market. A producer may manufacture its product in its home country, target market country, or a third country. Estimated model parameters describe the states of technology in different countries, barriers to international investment, and trade costs. It is found that the barriers to international trade and investment are highly correlated. The model is used to measure the extent of technology diffusion across countries, study the relationship between international production and trade, investigate the effects of free-trade agreements (FTAs) on offshoring, and to quantify the welfare effects of international production and trade.

Suggested Citation

  • Serge Shikher, 2014. "International production, technology diffusion, and trade," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 23(1), pages 111-154, February.
    • Handle: RePEc:taf:jitecd:v:23:y:2014:i:1:p:111-154
    DOI: 10.1080/09638199.2012.667142
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    Cited by:

    1. Ozlem Yaylaci, 2012. "Evolution of Trade Costs," EcoMod2012 4267, EcoMod.
    2. Nelson Lind & Natalia Ramondo, 2018. "Innovation, Knowledge Diffusion, and Globalization," NBER Working Papers 25071, National Bureau of Economic Research, Inc.
    3. Xu, Jiuping & Gao, Wen & Xie, Heping & Dai, Jingqi & Lv, Chengwei & Li, Meihui, 2018. "Integrated tech-paradigm based innovative approach towards ecological coal mining," Energy, Elsevier, vol. 151(C), pages 297-308.
    4. Alviarez, Vanessa, 2019. "Multinational production and comparative advantage," Journal of International Economics, Elsevier, vol. 119(C), pages 1-54.
    5. Xiaoyong Qiao & Xingyao Li & Xin Ling & Rui Xue & Claude Baron & Xiaoxuan Xin, 2023. "Value-Added Trade, Trade Barriers, and International Technology Spillover—Evidence from China’s Manufacturing Industry," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 13(2), pages 1-6.

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    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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