SUPER‐SPECIALIZATION AND THE GAINS FROM TRADE

Sven W. Arndt

Contemporary Economic Policy, 1998, vol. 16, issue 4, 480-485

Abstract: An important facet of “globalization” is the spread of cross‐border production, which is variously known as intro product specialization, super‐specialization, or production fragmentation. This advanced stage in the international division of labor works particularly well between high‐wage developed and low‐wage emerging economies. But it is precisely this context in which the practice has been criticized for destroying jobs and undermining wages. This paper examines the welfare implications of this type of specialization on the part of labor‐intensive, import‐competing industries in advanced countries. The results will surprise the skeptics, for when import‐competing industries abandon production of labor‐intensive components, wages rise and industry employment and output expand. National welfare increases. For a large country, the terms of trade improve, raising national welfare still further.

Date: 1998
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

Downloads: (external link)
https://doi.org/10.1111/j.1465-7287.1998.tb00535.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:coecpo:v:16:y:1998:i:4:p:480-485

Ordering information: This journal article can be ordered from
https://ordering.onl ... 5-7287&ref=1465-7287

Access Statistics for this article

Contemporary Economic Policy is currently edited by Brad R. Humphreys

More articles in Contemporary Economic Policy from Western Economic Association International Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().