Trade and Protection with Multistage Production / Avinash K. Dixit, Gene M. Grossman.

Format:

Book

Author/Creator:

Dixit, Avinash K.

Contributor:

National Bureau of Economic Research.

Grossman, Gene M.

Series:

Working Paper Series (National Bureau of Economic Research) no. w0794.

NBER working paper series no. w0794

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1981.

Summary:

This paper analyzes trade in manufactured goods that are produced via a vertical production structure with many stages, where some value is added at each to an intermediate product to yield a good-in-process ready for the next stage. We consider the stage at which a good is traded to be an economically endogenous variable, with comparative advantage determining the pattern of production specialization by stages across countries. We study how endowment changes and policy shifts move the margin of comparative advantage, which thus provides a channel for resource allocation adjustment that is additional to the usual ones of factor substitution and changes in the quantity of output.

Notes:

Print version record

November 1981.