Intra-firm Specialization, Income Distribution, and International Trade

Intra-firm Specialization, Income Distribution, and International Trade

The impact of international trade on a firm`s degree of specialization and income distribution is studied in a general equilibrium framework in which firms engage in oligopolistic competition. International trade increases a firm`s degree of specialization, but the number of goods a country produces may not change. Trade may lower the welfare of the scarce factor of production. Sufficient conditions for a country`s welfare to increase with trade are provided.

Ⅰ. Introduction

Ⅱ. The Model

Ⅲ. The Impact of International Trade

Ⅳ. Concluding Remarks

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