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The paper surveys the international trade literature on intraindustrial and interindustrial production externalities … the externalities are output-generated, and the economies of scale are external (internal) to individual firms (industry … externalities …
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We discuss general equilibrium effects of endowment changes in a small open and competitive economy with scale diseconomies. We argue that adverse Rybczynski effects may be observed when inputs are both superior and gross substitutes in the aggregate. The analysis is based on cost functions and...
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