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Trade Patterns and Export Pricing Under Non-CES Preferences
Social Science Research Network
We develop a two-factor, two-sector trade model of monopolistic competition with variable elasticity of substitution. Firm prot and rm size may increase or decrease with market integration depending on the degree of asymmetry between countries. The country in which capital is relatively abundant is a net exporter of the manufactured good, while both rms' size and prots are lower in this country than in the country where capital is relatively scarce. By contrast, the pricing policy adopted bydoi:10.2139/ssrn.2419940 fatcat:uj7cm2oe6fftrg5lwjgxx7wtie