Global Value Chains and Unequal Exchange- Market Power and Monopoly Power
Deepankar Basu () and
Ramaa Vasudevan ()
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Deepankar Basu: Department of Economics, University of Massachusetts Amherst
UMASS Amherst Economics Working Papers from University of Massachusetts Amherst, Department of Economics
We revisit the hypotheses of unequal exchange and deteriorating terms of trade in the specific context of import-intensive, export- led strategies of developing countries which rely on integration into GVCs for access to markets in developed countries using a stylized two-country two-commodity Classical- Marxian trade model. Two sources of asymmetry can be distinguished: market power arising from the competition between suppliers that depresses the prices at which the final good is supplied; and monopoly power arising from the lead firms control and ownership of intangible assets including brand and design. The model explores some implications of these two sources of asymmetry.
Keywords: Unequal Exchange; Global Value Chains; Classical Trade Model (search for similar items in EconPapers)
JEL-codes: F02 F23 O19 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-cwa, nep-hme, nep-ind, nep-int, nep-isf, nep-opm and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:ums:papers:2021-13
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