American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Increasing Returns and All That: A View from Trade
American Economic Review
vol. 92,
no. 1, March 2002
(pp. 93–119)
Abstract
Do scale economies help to explain international trade flows? Using a large database on output, trade flows, and factor endowments, we find that allowing for the presence of increasing returns to scale in production significantly increases our ability to predict international trade flows. In particular, using trade data, we find that a third of all goods-producing industries are characterized by increasing returns to scale. Thus, scale economies are a quantifiable and important source of comparative advantage. (JEL F11, F12, D2)Citation
Antweiler, Werner, and Daniel Trefler. 2002. "Increasing Returns and All That: A View from Trade ." American Economic Review, 92 (1): 93–119. DOI: 10.1257/000282802760015621JEL Classification
- F12 Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F14 Empirical Studies of Trade