Rights statement: This is the peer reviewed version of the following article: SSoo KT. Country size and trade in intermediate and final goods. World Econ. 2018;41:634–652. https://doi.org/10.1111/twec.12538 which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1111/twec.12538/abstract This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
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Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - Country size and trade in intermediate and final goods
AU - Soo, Kwok Tong
N1 - This is the peer reviewed version of the following article: SSoo KT. Country size and trade in intermediate and final goods. World Econ. 2018;41:634–652. https://doi.org/10.1111/twec.12538 which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1111/twec.12538/abstract This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
PY - 2018/2
Y1 - 2018/2
N2 - This paper documents a negative relationship between country size and the share of final consumption goods in total exports. A model is developed, based on the division of labour and comparative advantage, to explain this relationship. Labour is used to produce traded intermediate inputs which are used in the production of traded final goods. Large countries gain relatively more from comparative advantage than from the division of labour, while the opposite is true for small countries. As in the data, large countries export a smaller share of final goods and a larger share of intermediate goods than small countries. It is shown that the model developed in the paper yields the same results as a model based on monopolistic competition.
AB - This paper documents a negative relationship between country size and the share of final consumption goods in total exports. A model is developed, based on the division of labour and comparative advantage, to explain this relationship. Labour is used to produce traded intermediate inputs which are used in the production of traded final goods. Large countries gain relatively more from comparative advantage than from the division of labour, while the opposite is true for small countries. As in the data, large countries export a smaller share of final goods and a larger share of intermediate goods than small countries. It is shown that the model developed in the paper yields the same results as a model based on monopolistic competition.
KW - Country size
KW - Division of labour
KW - Comparative advantage
KW - Gains from trade
KW - intermediate goods trade
U2 - 10.1111/twec.12538
DO - 10.1111/twec.12538
M3 - Journal article
VL - 41
SP - 634
EP - 652
JO - The World Economy
JF - The World Economy
SN - 0378-5920
IS - 2
ER -