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Integration, Fragmentation and the Geography of Welfare

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  • Barbara Dluhosch
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    Abstract

    The welfare effects of trade integration with endogenous production technology are examined in a monopolistic competition framework. In addition to explaining industry location, trade patterns and accompanying effects on local welfare, the analysis highlights the endogenous change in the costs of supervising fragmented production when economies open up to trade. By regarding fragmentation as a skill-intensive activity, factor proportions (rather than size) strongly affect the international distribution of gains from trade. Nevertheless, albeit not generally, for a wide range of parameter values, even a skill-poor country can participate in the gains-despite loss of industry. Copyright The editors of the "Scandinavian Journal of Economics" 2006 .

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

    Volume (Year): 108 (2006)
    Issue (Month): 3 (October)
    Pages: 459-479

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    Handle: RePEc:bla:scandj:v:108:y:2006:i:3:p:459-479

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    Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442

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    Cited by:
    1. Petrakos, George & Dimitris, Kallioras & Ageliki, Anagnostou, 2007. "A Generalized Model of Regional Economic Growth in the European Union," Papers DYNREG12, Economic and Social Research Institute (ESRI).

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