Economic integration, product cycles and regime effects

Ying Liu, Zhe Wang and Xiaopeng Yin

International Review of Economics & Finance, 2016, vol. 43, issue C, 275-283

Abstract: By adopting the modified north–south product cycle model of Grossman and Helpman (G&H, hereafter) (1991a) and adding “two-way” FDIs to form a complete economic integration, we obtain the opposite conclusion for such regime effects from that of both Krugman (1979) and G&H (1991b) in different frameworks, while G&H (1991a) have similar results in the same oligopolistic framework (without FDIs) we adopt. This demonstrates that the relative wage rate between the north and south will not be affected by the size of labor markets and that there are no regime effects on relative wage rate, regardless of their existing FDIs.

Keywords: Product cycle; Two-way FDI; Regime effect; Innovation; Labor market (search for similar items in EconPapers)
JEL-codes: F14 F21 L62 P23 P33 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:43:y:2016:i:c:p:275-283

DOI: 10.1016/j.iref.2016.02.015

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