Can market size outweigh adverse comparative advantage?

Article


Gottschalk, S. 2002. Can market size outweigh adverse comparative advantage? Journal of International Trade and Economic Development. 11 (1), pp. 43-61. https://doi.org/10.1080/09638190110093154
TypeArticle
TitleCan market size outweigh adverse comparative advantage?
AuthorsGottschalk, S.
Abstract

This paper investigates the roles of comparative advantage and market size in the international location of manufacturing production. Building on the conventional Helpman and Krugman (1985) general equilibrium framework, our analysis extends the present literature by incorporating both effects in the same model, while allowing trade costs to vary almost continuously from autarky to free trade. The main result of our exercise is that market size effects offset comparative advantage if countries have similar factor proportions. A large country with a slight comparative disadvantage in manufacturing production may thus be a net exporter of manufactures. A small country with the same comparative disadvantage would be a net importer of manufactures.

LanguageEnglish
PublisherTaylor & Francis (Routledge)
JournalJournal of International Trade and Economic Development
ISSN0963-8199
Electronic1469-9559
Publication dates
Print01 Jan 2002
Online09 Dec 2010
Publication process dates
Deposited15 Feb 2021
Accepted01 Oct 2002
Output statusPublished
Digital Object Identifier (DOI)https://doi.org/10.1080/09638190110093154
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