Abstract
As one of the main developments of the standard Heckscher-Ohlin model, the issue of variable returns to scale has drawn much attention in the literature of trade theory. It actually deserves serious attention because increasing returns to scale operate on production in a considerable number of industries nowadays and because a good deal of modern trade seems to rely on a scale merit arising from this feature. When increasing returns to scale exist in an industry, the industry usually has a tendency to be monopolized. But a different style of variable returns to scale can be recognized when scale economies are external to firms. In this case, perfect competition is consistent with variable returns to scale.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Chang, W., 1981, “Production Externalities, Variable Returns to Scale, and the Theory of Trade,” International Economic Review 22, 511–525.
Eaton, J. and A. Panagariya, 1979, “Gains from Trade under Variable Returns to Scale, Commodity Taxation, Tariffs and Factor Market Distortions,” Journal of International Economics 9, 481–501.
Helpman, E., 1981, “International Trade in the Presence of Product Differentiation, Economies of Scale and Monopolistic Competition: A Chamberlin-Heckscher-Ohlin Approach,” Journal of International Economics 11, 305–340.
Helpman, E., 1983, “Variable Returns to Scale and International Trade: Two Generalizations,” Economics Letters 11, 167–174.
Helpman, E., 1984, “Increasing Returns, Imperfect Markets, and Trade Theory,” in Handbook of International Economics Vol. 1, ed. by R. Jones and P. Kenen, North-Holland, Amsterdam.
Herberg, H. and M.C. Kemp, 1969, “Some Implications of Variable Returns to Scale,” Canadian Journal of Economics 2, 403–415.
Herberg, H. and M.C. Kemp, 1980, “In Defence of Some Paradoxes of Trade Theory,” American Economics Review 70, 812–81 4.
Herberg, H., M.C. Kemp and M. Tawada, 1982, “Further Implications of Variable Returns to Scale,” Journal of International Economics 13, 65–84.
Kemp, M.C. and T. Negishi, 1970, “Variable Returns to Scale, Commodity Taxes, Factor Market Distortions and Their Implications for Trade Gains,” Swedish Journal of Economics 72, 1–11.
Krugman, P. 1979, “Increasing Returns, Monopolistic Competition, and International Trade,” Journal of International Economics 9, 469–479.
Krugman, P., 1980, “Scale Economics, Product Differentiation, and the Pattern of Trade,” American Economic Review 70, 950–959.
Markusen, J., 1981, “Trade and Gains from Trade with Imperfect Competition,” Journal of International Economics 11, 531–551.
Laing, N.F., 1961, “Factor Price Equalization in International Trade and Returns to Scale,” Economic Record 37, 339–351.
Mayer, W., 1974, “Variable Returns to Scale in General Equilibrium Theory: A Comment,” International Economic Review 15, 225–235.
Nikaido, H., 1972, Convex Structures and Economic Theory, Academic Press, New York.
Panagariya, A., 1980, “Variable Returns to Scale in General Equilibrium Theory Once Again,” Journal of International Economics 10, 499–526.
Panagariya, A., 1983, “Variable Returns to Scale and the Heckscher-Ohlin and Factor-Price-Equalization Theorems,” Weltwirtschaftliches Archiv 119, 259–280.
Samuelson, P., 1939, “The Gains from International Trade,” Canadian Journal of Economics and Political Science 5, 195–205.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 1989 Springer-Verlag Berlin Heidelberg
About this chapter
Cite this chapter
Tawada, M. (1989). The Heckscher-Ohlin-Samuelson Analysis of International Trade under Homothetic Production Externalities. In: Production Structure and International Trade. Lecture Notes in Economics and Mathematical Systems, vol 327. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-45664-0_4
Download citation
DOI: https://doi.org/10.1007/978-3-642-45664-0_4
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-50916-5
Online ISBN: 978-3-642-45664-0
eBook Packages: Springer Book Archive