Palgrave Handbook of International Trade

727 Pages·2013·3.402 MB·English

by  Daniel Bernhofen, Rod Falvey, David Greenaway, Udo Kreickemeier (eds.)

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PALGRAVE
HANDBOOK OF
INTERNATIONAL TRADE
Edited by Daniel Bernhofen,
Rod Falvey, David Greenaway
and Udo Kreickemeier
Palgrave Handbook of International Trade
This page intentionally left blank
Palgrave Handbook of
International Trade
Editedby
Daniel Bernhofen
AmericanUniversity,US
Rod Falvey
BondUniversity,Australia
David Greenaway
UniversityofNottingham,UK
and
Udo Kreickemeier
UniversityofTübingen,Germany
Palgrave
macmillan
EditorialandSelection©DanielBernhofen,RodFalvey,DavidGreenawayand
UdoKreickmeier2011,2013
IndividualChapters©Contributors2011,2013
Allrightsreserved.Noreproduction,copyortransmissionofthis
publicationmaybemadewithoutwrittenpermission.
Noportionofthispublicationmaybereproduced,copiedortransmittedsave
withwrittenpermissionorinaccordancewiththeprovisionsoftheCopyright,
DesignsandPatentsAct1988,orunderthetermsofanylicencepermitting
limitedcopyingissuedbytheCopyrightLicensingAgency,SaffronHouse,
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Anypersonwhodoesanyunauthorizedactinrelationtothispublication
maybeliabletocriminalprosecutionandcivilclaimsfordamages.
Theauthorshaveassertedtheirrightstobeidentifiedastheauthorsofthiswork
inaccordancewiththeCopyright,DesignsandPatentsAct1988.
Firstpublishedin2011
Firstpublishedinpaperback2013by
PALGRAVEMACMILLAN
PalgraveMacmillanintheUKisanimprintofMacmillanPublishersLimited,
registeredinEngland,companynumber785998,ofHoundmills,Basingstoke,
HampshireRG216XS.
PalgraveMacmillanintheUSisadivisionofStMartin’sPressLLC,
175FifthAvenue,NewYork,NY10010.
PalgraveMacmillanistheglobalacademicimprintoftheabovecompanies
andhascompaniesandrepresentativesthroughouttheworld.
Palgrave®andMacmillan®areregisteredtrademarksintheUnitedStates,
theUnitedKingdom,Europeandothercountries
ISBN 978-1-137-35180-7 ISBN 978-0-230-30531-1 (eBook)
DOI 10.1007/978-0-230-30531-1
Thisbookisprintedonpapersuitableforrecyclingandmadefromfully
managedandsustainedforestsources.Logging,pulpingandmanufacturing
processesareexpectedtoconformtotheenvironmentalregulationsofthe
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AcataloguerecordforthisbookisavailablefromtheBritishLibrary.
AcatalogrecordforthisbookisavailablefromtheLibraryofCongress.
Contents
ListofTables vii
ListofFigures viii
NotesonContributors xi
1 Editors’Introduction 1
DanielBernhofen,RodFalvey,DavidGreenawayandUdoKreickemeier
PartA FoundationsandModellingFrameworks
2 TheDevelopmentofInternationalTradeTheory 15
RoyJ.Ruffin
3 GeneralEquilibriumTradeTheory 39
AlanWoodland
4 TheEmpiricsofGeneralEquilibriumTradeTheory 88
DanielM.Bernhofen
5 GeneralEquilibriumTradeTheoryandFirmBehaviour 119
KristianBehrensandGianmarcoI.P.Ottaviano
6 Firms’InternationalisationStrategies:TheEvidence 160
DavidGreenaway,RichardKnellerandDannyMcGowan
7 OligopolyandTrade 197
DermotLeahyandJ.PeterNeary
8 MultinationalFirms 236
JamesR.Markusen
PartB Policy
9 TheTheoryofTradePolicyandReform 265
RodFalveyandUdoKreickemeier
10 ThePoliticalEconomyofProtection 295
WilfredJ.Ethier
11 MeasurementofProtection 321
JamesE.Anderson
v
vi Contents
12 PreferentialTradeAgreements:TheoryandEvidence 349
PravinKrishna
13 TradeAgreements 367
CarstenKowalczykandRaymondRiezman
PartC SpecialTopics
14 TradeandLabourMarkets 391
CarlDavidsonandStevenJ.Matusz
15 TradeandtheEnvironment 423
BrianR.Copeland
16 EconomicGeography:AReviewoftheTheoreticalandEmpirical
Literature 497
StephenJ.Redding
17 GravityEquationsandEconomicFrictionsinthe
WorldEconomy 532
JeffreyH.BergstrandandPeterEgger
18 ComputationalGeneralEquilibriumModellingofInternational
Trade 571
JosephFrancoisandWillMartin
19 TradeandEconomicGrowth 594
PaulS.Segerstrom
20 Trade,TradePolicyandDevelopment 622
ChrisMilner
21 InternationalMigration 660
NoelGastonandDougNelson
Index 698
Tables
6.1 Characteristicsofexportersrelativetonon-exporters 163
6.2 Evidenceonpolicyinterventionandfirmexportresponses 169
6.3 Evidenceonexportmarketentryeffectsandfirms 171
6.4 Theimpactofoffshoringandoutsourcingonfirmproductivity 184
7.1 Rankingsofinvestmentlevelsindifferentequilibria 215
8.1 DevelopedcountriesassourcebutalsoasdestinationforFDI 237
8.2 SalesbyU.S.manufacturingaffiliates:exportstotheUnited
Statesandexportstothirdcountriesassharesintotalsalesand
totalexports,2003 238
8.3 CountrysizeasadeterminantofinwardFDI,1993 240
8.4 Grubel–Lloydindices,allcountriesinsample 240
16.1 Worldmarketaccess,supplieraccess,andGDPpercapita 511
16.2 MarketpotentialandwagesacrossU.S.counties 513
20.1 Averageeffectiveratesofprotectionforimportablesand
exportablesandtraderegimebiasindicesforaselectionof
countries 636
20.2 Asummaryofrealexchangerateresponsestotradepolicy
interventions 639
21.1 Estimatednumberofinternationalmigrants,1990–2010 661
21.2 Internationalmigration,bycountry 662
vii
Figures
2.1 Basictradediagramwithfreetrade 21
2.2 TheSamuelsondiagram 27
2.3 Lerner–Pearcediagram 29
3.1 Utilitypossibilitiesfrontierwithtwoconsumers 46
3.2 Competitiveequilibriumwithinternationaltrade 47
3.3 Factorendowments,diversificationconesandfactorprices 58
3.4 Factorpriceasafunctionoffactorendowment 59
3.5 TheRybczynskitheorem 61
3.6 TheStolper–Samuelsontheorem 64
3.7 Integratedequilibriumandfactorpriceequalization 70
3.8 TheRicardianequilibriuminproductspace 74
3.9 TheHeckscher–Ohlin–Samuelsonequilibriuminproductspace 79
4.1 Comparativeadvantageprediction 91
4.2 Heckscher–Ohlin–Vanekmodel 100
4.3 Heckscher–Ohlinpriceprediction 106
4.4 Multi-conespecification 107
5.1 Specializationandtradewithincreasingreturnsandendowment
differences 137
5.2 Specializationandtradeasafunctionofabsoluteendowment
differences 139
5.3 Specializationandtradeasafunctionofrelativeendowment
differences 140
5.4 Theselectioneffectoftradeliberalization 145
5.5 Comparativeadvantageandselection 148
5.6 FDIandselection 150
6.1 Theincidenceofexporting 161
6.2 Ratioofplantproductivitytofour-digitindustrymean 162
6.3 Thesuperstarexportersphenomenon 165
7.1 WelfareandtradecostsunderCournotandBertrandcompetition 202
7.2 Equilibriumproductionpatternsforagivencostdistribution 222
8.1 DecisiontreeforFDI.Motive:servehost-countrymarket(aka,
horizontal,market-seeking) 242
8.2 ValueofaffiliateproductionovertheworldEdgeworthbox 252
8.3 AffiliateproductionovertheworldEdgeworthbox:the
horizontalmodel 253
8.4 AffiliateproductionovertheworldEdgeworthbox:thevertical
model 254
9.1 Thecompetitiveequilibrium 267
9.2 Autarkyandtradewithmonopoly 269
viii
ListofFigures ix
9.3 Tariffwithasingledomesticfirm 271
9.4 Quotawithasingledomesticfirm 273
9.5 Aforeignmonopolist 274
9.6 Theoptimumtariff 275
9.7 Correctingaproductiondistortion 278
9.8 Generalequilibrium 281
9.9 Restrictedtariffreforms 288
10.1 Thetariffwithaninfluentialinterestgroup 300
10.2 Theterms-of-tradeexternalityapproach 310
10.3 Amutuallybeneficialtradeagreement 313
11.1 Thetrade-weightedaveragetariff:tariffratesandimport
demandelasticitiesnegativelycorrelated 331
11.2 Thetrade-weightedaveragetariff:tariffratesandimport
demandelasticitiespositivelycorrelated 332
11.3 TheTRIorwelfare-equivalentuniformtariff:tariffratesand
importdemandelasticitiesnegativelycorrelated 337
12.1 Tradecreatingtariffpreferences 351
12.2 Tradedivertingtariffpreferences 352
12.3 Partnercountrysizeandwelfare 354
13.1 Terms-of-tradeandvolume-of-tradeeffects 370
13.2 Consumptiongains 372
13.3 Productiongains 372
14.1 Relativedemandcurve 393
14.2 Demandsforlabour:skilledandunskilled 395
14.3 Zeroprofitcurves 395
14.4 Twosectormodel 408
15.1 Pollutionsupplyanddemand:threeScenarios 429
15.2 Effectoftradeliberlizationonpollutioniftheimport-competing
goodpollutes 432
15.3 Thepollutionhaveneffect:tighteningupenvironmentalpolicy
reducescompetitiveness 437
15.4 Morestringentenvironmentalpolicyneednotreduce
competitivenesswhenpollutionisgeneratedduring
consumption 438
15.5 Effectsofpollutionpolicyandcapitalabundanceonthe
patternoftrade 441
15.6 Tradeleadstofallinsteadystaterealincome 446
15.7 Renewableresourcesandthepatternoftrade 449
16.1 Core–peripherybifurcation 505
18.1 Representativenestedproductiontechnology 573
19.1 Steady-stateequilibriumproperties 614
21.1 Commodityandfactorprices 681