Trade patterns and export pricing under non-CES preferences

• 成果类型: Article
• 署名作者: Kichko, Sergey; Kokovin, Sergey; Zhelobodko, Evgeny
• 署名单位: HSE University (National Research University Higher School of Economics); Russian Academy of Sciences; Sobolev Institute of Mathematics; Novosibirsk State University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2014.06.004
• 发表日期: 2014
• 页码: 129-142
• 关键词: Two-factor trade model; monopolistic competition; Variable markups

摘要

We develop a two-factor, two-sector trade model of monopolistic competition with variable elasticity of substitution. Firms' profits and sizes may increase or decrease with market integration depending on the degree of asymmetry between countries. The country in which capital is relatively abundant is a net exporter of the manufactured good, although both firm sizes and profits are lower in this country than in the country where capital is relatively scarce. The pricing policy adopted by firms depends neither on capital endowment nor country asymmetry. It is determined by the nature of preferences: when demand elasticity increases (decreases) with consumption, firms practice dumping (reverse-dumping). (C) 2014 Elsevier B.V. All rights reserved.