Appropriation and comparative advantage

Jiancai Pi and Shuxi Duan ()
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Shuxi Duan: Nanjing University

Review of World Economics (Weltwirtschaftliches Archiv), 2024, vol. 160, issue 4, No 4, 1277-1304

Abstract: Abstract This paper analyzes how appropriation impacts comparative advantage through the general equilibrium approach. We find that appropriation can always reshape comparative advantage for both economies with strong and weak appropriation under different economic backgrounds. Specifically, whether the economy with stronger or weaker control on appropriation gains comparative advantage in the labor-intensive or capital-intensive product depends on the type of appropriation. More importantly, controlling on appropriation can make it feasible that a capital-intensive economy obtains comparative advantage in the labor-intensive product, which is against the prediction by the Heckscher-Ohlin theorem and may be helpful to explain the Leontief’s paradox. We also examine the welfare effect of controlling on appropriation and the relationship between appropriation and the optimal tariff.

Keywords: Appropriation; Comparative advantage; General equilibrium approach (search for similar items in EconPapers)
JEL-codes: D58 F11 K42 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10290-024-00542-8

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