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We propose a two-country monopolistic competition model of business service offshoring that captures the advantage conferred by time zone differences. We emphasize the role of the entrepreneurs, who decide how to produce business services (i.e., domestic service provision or service offshoring)....
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This study develops a model of trade that highlights the effects of the interconnection of country-specific communications networks as a driving force behind trade in high-tech products with positive transport costs. By constructing a two-country model of monopolistic competition with two...
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Although the one-factor Ricardian trade model with external economies of scale plays a significant role for the understanding of important trade issues under increasing returns, it lacks a compelling graphical representation. We propose a convincing graphical exposition that uses both the PPF...
Persistent link: https://www.econbiz.de/10008486880
Although the home-market effect has become one of the most important concepts in both trade theory and the new economic geography, it lacks a compelling graphical representation. The purpose of this note is to offer such a representation. We will decompose the homemarket effect into two steps: a...
Persistent link: https://www.econbiz.de/10008486881
In this note, we examine how trade liberalization affects the profits of firms in the presence of network effects. We will show that, contrary to conclusions in the previous literature, trade liberalization between identical countries increases firms profits despite intensified competition.
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