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Globalization, Technology Discrepancy And Specialization

Author

Listed:
  • SHANG-FEN WU

    (Department of International Trade, Chinese Culture University, Taiwan)

  • CHENG-TE LEE

    (Department of International Trade, Chinese Culture University, Taiwan)

Abstract

This paper sets up a theoretical monopolistic competition model to analyze the impact of globalization on specialization with different endogenous sunk-costs technologies between countries. We prove that the factors affecting the relationship between globalization and specialization include the country-size effect and the technology-advantage effect. We show that, in the case of a country with a smaller endogenous sunk-cost technology advantage, if the country-size effect dominates the technology-advantage effect, then the number of the firms in monopolistic competition or the level of specialization will rise after trade, and vice versa.

Suggested Citation

  • Shang-Fen Wu & Cheng-Te Lee, 2025. "Globalization, Technology Discrepancy And Specialization," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 70(03), pages 725-737, June.
    • Handle: RePEc:wsi:serxxx:v:70:y:2025:i:03:n:s0217590821500223
    DOI: 10.1142/S0217590821500223
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    More about this item

    Keywords

    Globalization; specialization; endogenous sunk costs; the country-size effect; the technology-advantage effect;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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