This paper develops a two-country, general equilibrium model of oligopoly in which the degree of horizontal product differentiation is endogenously determined by rms' strategic investments in product innovation. Consumers seek variety and product innovation is more skill intensive than...

This paper introduces an alternative indicator to evaluate the external sector behavior of a country or region. The objective of this indicator, titled 'The External Sector Vulnerability Monitoring Index' (henceforth ESVM) (λ), is to offer policy-makers and researchers a new analytical tool to...

Does international trade help or hinder the economic development of border regions relative to interior regions? Theory tends to suggest that trade helps, but it can also predict the reverse. The question is policy relevant as regions near land borders are generally poorer, and sometimes more...

Trade economists traditionally study the effect of lower variable trade costs. While increasingly important politically, technical barriers to trade (TBTs) have received less attention. Viewing TBTs as fixed regulatory costs related to the entry into export markets, we use a model with...

Measures to actively facilitate trade are increasingly seen as essential to assist developing countries in expanding trade and benefiting from globalisation. Although often viewed as narrowly concerned with the ease and speed of Customs procedures, even greater trade cost reductions and trade...

Three features of China's trade patterns suggest that elements beyond factor abundance explain its export performance. The high penetration in world markets of labourintensive products has been accompanied by: (i) a high share in exports of productivityadvanced foreign-owned enterprises (FIEs),...

Most existing commitments are confined to guaranteeing the levels of access that existed in the mid-1990s, when the Agreement entered into force, in a limited number of sectors. The only significant exceptions are the accession schedules of recent WTO Members and the negotiating results in two...

This paper examines how trade liberalization affects the innovation incentives of firms, and what this implies for industry productivity. For this purpose we develop a reciprocal dumping model of international trade with heterogeneous firms and endogenous R&D. Among the robust results that hold...

This paper creates a new index ("index of bilateral trade relation") to quantitatively evaluate the degree of regional economic integration based on countries' de facto bilateral trade relations. It concludes that a fundamental arrangement of East Asian regionalism should involve at least one of...

This paper analyzes the effect of trade liberalization on government spending in a general equilibrium model with a continuum of industries supplying tradable and nontradable goods under monopolistic competition. Trade liberalization is modeled as the opening up of product markets between two...