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Trade Liberalization and Technology Choice

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Author Info

  • Falvey, Rod
  • Reed, Geoff

Abstract

This paper considers the links between trade liberalization and technology choice in the nonliberalizing country. Trade-liberalization-induced changes in relative product prices have direct effects on equilibrium relative factor returns. The consequent changes in relative input costs may also lead producers to switch to alternative technologies, which will in turn induce a further indirect change in relative factor returns. Will this indirect affect exacerbate or ameliorate the direct effect on relative factor returns? It is found that this depends on the relative cost savings across sectors and factor cost shares. Copyright 2000 by Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 8 (2000)
Issue (Month): 3 (August)
Pages: 409-19

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Handle: RePEc:bla:reviec:v:8:y:2000:i:3:p:409-19

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Cited by:
  1. Ekholm, Karolina & Midelfart, Karen Helene, 2005. "Relative wages and trade-induced changes in technology," European Economic Review, Elsevier, vol. 49(6), pages 1637-1663, August.
  2. Wilfred J. Ethier, 2002. "Globalization, Globalisation," Tinbergen Institute Discussion Papers 02-088/2, Tinbergen Institute.
  3. G. Badri Narayanan, 2006. "Effects of trade liberalization on firm profits and social welfare: the role of technology," Applied Economics Letters, Taylor & Francis Journals, vol. 13(1), pages 63-66.

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