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Stolper-Samuelson Revisited: Trade and Distribution with Oligopolistic Profits

Robert Blecker ()

No 2012-06, Working Papers from American University, Department of Economics

Abstract: This paper investigates the distributional impact of international trade when goods markets are oligopolistic and firms partially pass-through changes in tariffs into prices and factor costs for differentiated products. Trade liberalization raises mark-ups and profit shares in the export industry and lowers them in the import-competing industry, while Stolper-Samuelson effects on real prices of primary factors are attenuated or possibly reversed. An extended model shows how "offshoring" (trade in intermediate goods) can potentially increase mark-ups for oligopolistic producers of final goods. The analysis illuminates why business interests generally support trade liberalization policies today, regardless of their countries' factor abundance.

JEL-codes: D33 D43 E12 F11 F12 (search for similar items in EconPapers)
Date: 2012-02
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https://doi.org/10.17606/4xjs-dh73 First version, 2012 (application/pdf)

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Journal Article: STOLPER–SAMUELSON REVISITED: TRADE AND DISTRIBUTION WITH OLIGOPOLISTIC PROFITS (2012) Downloads
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