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Property Rights, Mobile Capital, and Comparative Advantage

  • Karp, Larry

Recent papers show that imperfect property rights to a natural resource--a sector-specific factor--can be a source of comparative advantage. in these models, weaker property rights attract labor--the only mobile factor--to the resource sector, increasing the country's comparative advantage for that sector. If capital in addition to labor is mobile, and if the benefits of capital are non-excludable or if the degree of property rights is endogenous, a deterioration of property rights has ambiguous effects on comparative advantage and on the equilibrium wage-rental ratio.

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Paper provided by Institute of Industrial Relations, UC Berkeley in its series Institute for Research on Labor and Employment, Working Paper Series with number qt41h0b5v5.

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Date of creation: 07 Jun 2004
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Handle: RePEc:cdl:indrel:qt41h0b5v5
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  1. Branko Milanovic, 2003. "The Two Faces Of Globalization: Against Globalization As We Know It," Development and Comp Systems 0303007, EconWPA.
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  3. Karp, Larry & Zhao, Jinhua & Sacheti, Sandeep, 2003. "The long-run effects of environmental reform in open economies," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 246-264, March.
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  10. Copeland, Brian R. & Taylor, M. Scott, 1999. "Trade, spatial separation, and the environment," Journal of International Economics, Elsevier, vol. 47(1), pages 137-168, February.
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