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Chapter 3 Comparative Advantage and Trade Liberalization in a Chamberlinian–Ricardian Model

In: Globalization and Emerging Issues in Trade Theory and Policy

Author

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  • Toru Kikuchi
  • Koji Shimomura

Abstract

Purpose – The present note shows the interaction between technological differences between countries and the level of trade costs as a determinant of trade patterns. Methodology/approach – It takes the work of Kikuchi et al.'s (2008) Chamberlinian–Ricardian model as its point of departure, and extends the analysis to include both a continuum of industries, as did Dornbusch et al. (1977), and iceberg transport costs. Findings – It will be shown that trade liberalization drastically changes the nature of trade patterns, particularly the emergence of intra-industry trade. Originality/value – This present model extends the Chamberlinian–Ricardian model to include positive trade costs.

Suggested Citation

  • Toru Kikuchi & Koji Shimomura, 2008. "Chapter 3 Comparative Advantage and Trade Liberalization in a Chamberlinian–Ricardian Model," Frontiers of Economics and Globalization, in: Globalization and Emerging Issues in Trade Theory and Policy, pages 29-35, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:fegzzz:s1574-8715(08)05003-3
    DOI: 10.1016/S1574-8715(08)05003-3
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