Competitive versus comparative advantage
|Title:||Competitive versus comparative advantage||Authors:||Neary, J. Peter||Permanent link:||http://hdl.handle.net/10197/1325||Date:||Aug-2002||Abstract:||I explore the interactions between comparative, competitive and absolute advantage in a two-country model of oligopoly in general equilibrium. Comparative advantage always determines the direction of trade, but both competitive and absolute advantage affect resource allocation, trade patterns and trade volumes. Competitive advantage in the sense of more home firms drives foreign firms out of marginal sectors but also makes some marginal home sectors uncompetitive. Absolute advantage in the sense of a uniform fall in home costs tends to raise home output in all sectors but also leads both countries to specialise less in accordance with comparative advantage.||Funding Details:||Economic and Social Research Council (ESRC)||Type of material:||Working Paper||Publisher:||University College Dublin. School of Economics||Keywords:||Comparative and absolute advantage;Comparative and competitive advantage;Exchange-rate protection;GOLE (General Oligopolistic Equilibrium);Market integration||Subject LCSH:||Comparative advantage (International trade)
|Language:||en||Status of Item:||Not peer reviewed|
|Appears in Collections:||Economics Working Papers & Policy Papers|
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