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Input substitutability, trade costs and the product cycle

Listed author(s):
  • Tomasz Michalski

    ()

    (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique)

I exhibit a simple and realistic feature of technology and trade costs that influences the partition of manufacturing between the North and South depending on the degree of substitutability of internationally traded inputs in production. In the presence of higher wages in the North, when production of manufacturing goods requires tradeable, country-specic Ricardian inputs,goods with a low elasticity of substitution between inputs in production will have lower costs of manufacturing in the North and those with a high elasticity in the South.

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Paper provided by HAL in its series Working Papers with number hal-00579392.

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Date of creation: Jan 2011
Publication status: Published in 2011
Handle: RePEc:hal:wpaper:hal-00579392
Note: View the original document on HAL open archive server: https://hal-hec.archives-ouvertes.fr/hal-00579392
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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  1. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, Oxford University Press, vol. 80(2), pages 190-207.
  2. Pol Antràs, 2005. "Incomplete Contracts and the Product Cycle," American Economic Review, American Economic Association, vol. 95(4), pages 1054-1073, September.
  3. Mathias Thoenig & Thierry Verdier, 2003. "A Theory of Defensive Skill-Biased Innovation and Globalization," American Economic Review, American Economic Association, vol. 93(3), pages 709-728, June.
  4. Krugman, Paul R., 2000. "Technology, trade and factor prices," Journal of International Economics, Elsevier, vol. 50(1), pages 51-71, February.
  5. Daron Acemoglu, 2003. "Patterns of Skill Premia," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 199-230.
  6. Gene M. Grossman & Esteban Rossi-Hansberg, 2008. "Trading Tasks: A Simple Theory of Offshoring," American Economic Review, American Economic Association, vol. 98(5), pages 1978-1997, December.
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