SHERP

Service Multinationals in the Theory of International Trade

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Authors
Wang, Yunjong
Issue Date
1994
Publisher
Seoul Journal of Economics
Citation
Seoul Journal of Economics 7 (No. 1 1994): 35-52
Keywords
factor price equalizationwelfare gainsKIEP
Abstract
This paper examines the consequences of liberalizing trade in producer services through multinationals. The formation of multinationals in the present paper is not necessarily associated with the failure of factor price equalization. Similar economies in terms of factor endowments engage in two-way intra-industry foreign direct investment. However, the notion of comparative advantage is crucial in predicting the direction of trade and foreign direct investment when two countries differ in factor endowments. In a two-country general equilibrium model of international trade, liberalizing both trade and foreign direct investment gives rise to welfare gains.
ISSN
1225-0279
Language
English
URI
http://hdl.handle.net/10371/1032
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College of Social Sciences (사회과학대학)Institute of Economics Research (경제연구소)Seoul Journal of EconomicsSeoul Journal of Economics vol.07(1) (Spring 1994)
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