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Appropriation and comparative advantage

Author

Listed:
  • Jiancai Pi

    (Nanjing University)

  • Shuxi Duan

    (Nanjing University)

Abstract

This paper analyzes how appropriation impacts comparative advantage through the general equilibrium approach. We find that appropriation can always reshape comparative advantage for both economies with strong and weak appropriation under different economic backgrounds. Specifically, whether the economy with stronger or weaker control on appropriation gains comparative advantage in the labor-intensive or capital-intensive product depends on the type of appropriation. More importantly, controlling on appropriation can make it feasible that a capital-intensive economy obtains comparative advantage in the labor-intensive product, which is against the prediction by the Heckscher-Ohlin theorem and may be helpful to explain the Leontief’s paradox. We also examine the welfare effect of controlling on appropriation and the relationship between appropriation and the optimal tariff.

Suggested Citation

  • Jiancai Pi & Shuxi Duan, 2024. "Appropriation and comparative advantage," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 160(4), pages 1277-1304, November.
  • Handle: RePEc:spr:weltar:v:160:y:2024:i:4:d:10.1007_s10290-024-00542-8
    DOI: 10.1007/s10290-024-00542-8
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    More about this item

    Keywords

    Appropriation; Comparative advantage; General equilibrium approach;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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