The Role of Intra-National Trade in Trade Theory

Yong He () and Guang-Zhen Sun
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Yong He: CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne

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Abstract: This paper explores the implications arising from the heterogeneous firm model for a theory of trade in which intranational trade is an intrinsic part, and international trade is its extension. Due to market competition, intranational trade dynamically leads to an increase in productivity heterogeneity across firms, which strengthens market selection and makes allocation more efficient. It also strengthens comparative advantage, and thus stimulates international trade

Keywords: Intra-National and International Trade; Heterogeneous Firm Model; Market Selection; Comparative Advantage (search for similar items in EconPapers)
Date: 2022
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Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03916051v1
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Published in Theoretical Economics Letters, 2022, 12 (06), pp.1673-1692. ⟨10.4236/tel.2022.126092⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-03916051

DOI: 10.4236/tel.2022.126092

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