This article develops a dual general equilibrium model to analyze the effects of intra-industry trade in both intermediate goods and final goods on the productivity in the final good production. Intra-industry trade in intermediate goods determines an increase in the number of intermediate good...

This article analyses the economic advantages of intra-industry trade in both a final good and the connected intermediate good. In comparison with a situation of autarky, this type of trade brings about an increase in the total number of intermediate good varieties and thereby a reduction in the...