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Effects of Trade Reform on Health and Tourism Sectors of the Reforming Country

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  • Biswajit Mandal
  • Soumyadip Chattopadhyay
  • Alaka Shree Prasad

Abstract

Health trade and related tourism have become prevalent in recent times, particularly in countries where quality medical services are provided at a relatively low cost. Therefore, using a competitive general equilibrium trade model, this article theoretically attempts to find possible complementarity between the health sector and the tourism sector in a small open developing economy. While exploring the results, this article also finds the effect of trade reform on factor prices, per unit factor requirement and output of different sectors of the economy. Capital owners are seen to lose with trade reform, while labours and doctors gain. Eventually, both health and tourism sectors are found to be complementary in nature. However, expansion of these sectors is conditional on factor intensity assumption. Following this, we briefly touch upon the possible effects of deglobalisation in such an economy. We find that capitalists gain, whereas both doctors and labours suffer loss. Complementarity between health and tourism sectors persists, and the size of different sectors is again found to depend on factor intensity.

Suggested Citation

  • Biswajit Mandal & Soumyadip Chattopadhyay & Alaka Shree Prasad, 2019. "Effects of Trade Reform on Health and Tourism Sectors of the Reforming Country," Review of Market Integration, India Development Foundation, vol. 11(3), pages 176-189, December.
    • Handle: RePEc:sae:revmar:v:11:y:2019:i:3:p:176-189
    DOI: 10.1177/0974929220969680
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    References listed on IDEAS

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    1. Marjit, Sugata, 2003. "Economic reform and informal wage--a general equilibrium analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 371-378, October.
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    3. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
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    5. Smith, Richard D, 2004. "Foreign direct investment and trade in health services: A review of the literature," Social Science & Medicine, Elsevier, vol. 59(11), pages 2313-2323, December.
    6. Ronald Jones & Sugata Marjit, 2009. "Competitive trade models and real world features," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 41(1), pages 163-174, October.
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