International trade in the presence of product differentiation, economies of scale and monopolistic competition. A Chamberlin-Heckscher-Ohlin approach

Elhanan Helpman*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

The paper presents a generalization of the Heckscher-Ohlin theory by admitting the existence of sectors in which there is monopolistic competition. The structure of preferences is based on Lancaster's work. It is shown without requiring homotheticity in the production of differentiated products that the intersectoral pattern of trade can be predicted from factor endowments but not from pre-trade commodity prices or factor rewards, except under special circumstances. It is also shown how the share of intra-industry trade is related to differences in income per capita and how the volume of trade depends on differences in income per capita and relative country-size Other empirical implications are also discussed.

Original languageEnglish
Pages (from-to)305-340
Number of pages36
JournalJournal of International Economics
Volume11
Issue number3
DOIs
StatePublished - Aug 1981

Funding

FundersFunder number
Stockholms Universitet
Riksbankens Jubileumsfond

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