Trade liberalization and welfare: Differentiated-good versus homogeneous-good markets

Hajime Takatsuka, Dao Zhi Zeng

Research output: Contribution to journalArticlepeer-review

10 Citations (Scopus)

Abstract

In this paper, we examine the effects of liberalization on industrial location and national welfare in a framework of new economic geography. Specifically, we explicitly incorporate arbitrary trade costs in both differentiated-good and homogeneous-good sectors into a two-country model, and clarify the effects of trade-barrier reduction in each sector. We show that their impacts on welfare levels in the two countries are different, and, if an industry is liberalized while the other is protected, a conflict between the countries might occur. Therefore, appropriate liberalization in both sectors is effective to alleviate such a conflict.

Original languageEnglish
Pages (from-to)308-325
Number of pages18
JournalJournal of the Japanese and International Economies
Volume26
Issue number3
DOIs
Publication statusPublished - 2012 Sep 1

Keywords

  • Firm location
  • Home market effect
  • Trade costs
  • Trade liberalization
  • Welfare

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics
  • Political Science and International Relations

Fingerprint Dive into the research topics of 'Trade liberalization and welfare: Differentiated-good versus homogeneous-good markets'. Together they form a unique fingerprint.

Cite this