FACTOR MOVEMENTS AND COMMODITY TRADE AS COMPLEMENTS

James Markusen

Chapter 15 in Broadening Trade Theory:Incorporating Market Realities into Traditional Models, 2021, pp 325-340 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Several models are presented in which factor mobility leads to an increase in the volume of world trade. The models share the common characteristic that the basis for trade is something other than differences in relative factor endowments. These alternative bases for trade include returns to scale, imperfect competition, production and factor taxes, and differences in production technology. Taken together, the models suggest a more general idea: the widely held notion that trade in goods and factors are substitutes is in fact a rather special result which is a general characteristic only of factor proportions models.

Keywords: Multinational Firms; Horizontal Multinationals; Vertical Multinationals; Internalization; Vertical Integration; Outsourcing; Foreign Affiliates; Per-Capita Income; Non-homothetic Preferences; Income Elasticity of Demand; Missing Trade Puzzle; Skill Premium Puzzle; Pro-competitive Gains From Trade; Complements; Externalities (search for similar items in EconPapers)
JEL-codes: F00 F02 F13 F41 F43 (search for similar items in EconPapers)
Date: 2021
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Related works:
Journal Article: Factor movements and commodity trade as complements (1983)
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