In this paper, to investigate how an increase in the price of natural resources affects the level of technology, we develop an endogenous variety expansion model of a small open economy based on that of Grossman and Helpman (1991, Ch. 3). We conclude that an increase in the price of natural...

This paper constructs a North–South endogenous growth model to investigate how the organizational forms of final goods firms evolve. Initially, the final goods firms in the North obtain intermediate goods from Northern firms and produce in the North. When trade costs are sufficiently low, as...