Trade Liberalization, Division of Labor, and Firm Productivity

Keita Kamei

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we construct a simplified general oligopolistic equilibrium (GOLE) model, in which Smith's (1776) famous theory of division of labor is embedded. In the absence of labor market integration with trading countries, we show that trade liberalization promotes a reduction of the number of firms in each country and a deeper division of labor, thus increasing firm productivity and improving welfare. Our model suggests a new interpretation of the trade-induced firm productivity effect.

Keywords: Trade Liberalization; Division of Labor; Firm Productivity; Cournot Competition; General Oligopolistic Equilibrium (GOLE) (search for similar items in EconPapers)
JEL-codes: F1 F12 F16 L1 L16 (search for similar items in EconPapers)
Date: 2013-09-30
New Economics Papers: this item is included in nep-bec, nep-eff and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:50301

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