GLOBALIZATION, TECHNOLOGY DISCREPANCY AND SPECIALIZATION

Shang-Fen Wu and Cheng-Te Lee
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Shang-Fen Wu: Department of International Trade, Chinese Culture University, Taiwan
Cheng-Te Lee: Department of International Trade, Chinese Culture University, Taiwan

The Singapore Economic Review (SER), 2025, vol. 70, issue 03, 725-737

Abstract: This paper sets up a theoretical monopolistic competition model to analyze the impact of globalization on specialization with different endogenous sunk-costs technologies between countries. We prove that the factors affecting the relationship between globalization and specialization include the country-size effect and the technology-advantage effect. We show that, in the case of a country with a smaller endogenous sunk-cost technology advantage, if the country-size effect dominates the technology-advantage effect, then the number of the firms in monopolistic competition or the level of specialization will rise after trade, and vice versa.

Keywords: Globalization; specialization; endogenous sunk costs; the country-size effect; the technology-advantage effect (search for similar items in EconPapers)
JEL-codes: F12 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1142/S0217590821500223

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