Capital inflow, vanishing sector and wage distribution in an economy with corruption related intermediation
This paper formulates a specific factor model of trade with skilled and unskilled workers as the specific and capital as the mobile factors. Production of goods is subject to intermediation and corruption. We then allow for international capital mobility and show that corruption as an activity may be squeezed out if the cost of intermediation is held fixed at any exogenously fixed level.
Volume (Year): 32 (2012)
Issue (Month): 3 ()
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