Trade Liberalization, Divison of Labor and Welfare under Oligopoly

Kenji Fujiwara () and Keita Kamei

No 151, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: Incorporating explicitly division of labor into a two-country general oligopolistic equilibrium model, we examine the effects of trade liberalization on firm productivity and welfare. We show that a tariff reduction increases the firm productivity of the trading industries but decreases that of the non-trading industries. An expansion of the trading industries, in contrast, decreases the firm productivity of both the trading and non-trading industries. We then find that a tariff reduction necessarily reduces welfare while the welfare effect of expansion of trading industries is ambiguous.

Keywords: General oligopolistic equilibrium; division of labor; firm productivity; welfare (search for similar items in EconPapers)
JEL-codes: F10 F12 L25 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2016-11, Revised 2016-11
New Economics Papers: this item is included in nep-int
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http://192.218.163.163/RePEc/pdf/kgdp151.pdf First version, 2016 (application/pdf)

Related works:
Journal Article: Trade liberalization, division of labor and welfare under oligopoly (2018)
Working Paper: Trade Liberalization, Division of Labor and Welfare under Oligopoly (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:151

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