Trade Patterns and Welfare
نویسندگان
چکیده
By employing a model with international trade costs and imperfect competition, in which a domestic firm serves both the domestic market and the foreign market, we show that intraindustry trade compared to intersectoral trade is globally, but not mutually, welfare improving. When also foreign firms become active, competition strengthens but domestic welfare declines, because domestic consumers have to bear trade costs. • JEL Classifications: F12, F15 •
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