Trade Integration, Global Value Chains, and Capital Accumulation

Michael Sposi, Kei-Mu Yi and Jing Zhang

IMF Economic Review, 2021, vol. 69, issue 3, No 3, 505-539

Abstract: Abstract Motivated by increasing trade and fragmentation of production across countries, accompanied by income convergence by many emerging economies, we build a dynamic two-country model featuring sequential, multi-stage production and capital accumulation. As trade costs decline over time, global-value-chain (GVC) trade expands across countries, particularly more in the faster-growing country, consistent with the empirical pattern. Via Heckscher–Ohlin forces, GVC trade can generate back-and-forth feedback between comparative advantage and capital accumulation (growth). Moreover, GVC trade increases both steady-state and dynamic gains from trade.

JEL-codes: E22 F10 F43 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://link.springer.com/10.1057/s41308-021-00141-9 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Trade Integration, Global Value Chains and Capital Accumulation (2020)
Working Paper: Trade Integration, Global Value Chains, and Capital Accumulation (2020)
Working Paper: Trade Integration, Global Value Chains, and Capital Accumulation (2020)
Working Paper: Trade Integration, Global Value Chains, and Capital Accumulation (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:imfecr:v:69:y:2021:i:3:d:10.1057_s41308-021-00141-9

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41308/PS2

DOI: 10.1057/s41308-021-00141-9

Access Statistics for this article

More articles in IMF Economic Review from Palgrave Macmillan, International Monetary Fund
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().