Template-Type: ReDIF-Paper 1.0
Author-Name: Kwok Tong Soo
Author-Name-First: Kwok Tong
Author-Name-Last: Soo
Title: The gains from trade in intermediate goods
Abstract: This paper develops a model of intermediate and final goods trade based on comparative advantage. Firms endogenously decide whether to produce a final good directly using labour, or indirectly using both labour and intermediate inputs. It is shown that the gains from trade in intermediate and final goods exceeds that from trade in final goods alone. Allowing for decreasing trade and coordination costs results in an endogenous change in the structure of production towards a more fragmented structure, with corresponding implications for trade patterns. 
Creation-Date: 2014
File-URL: http://www.lancaster.ac.uk/media/lancaster-university/content-assets/documents/lums/economics/working-papers/RicardoSraffaSamuelson.pdf
File-Format: application/pdf
Number: 63719205
Classification-JEL: 
Keywords: Intermediates trade, Comparative advantage, Structure of production
Handle: RePEc:lan:wpaper:63719205