Document Type
Article
Publication Date
2014
DOI
10.3868/s060-003-014-0028-0
Publication Title
Frontiers of Economics in China
Volume
9
Issue
4
Pages
606-633
Abstract
In this general equilibrium framework, the transportation sector is modeled as a distinct sector with increasing returns. A more advanced technology has a higher fixed cost but a lower marginal cost of production. Even with both manufacturing firms and transportation firms engaged in oligopolistic competition and optimally choosing their technologies, the model is tractable and results are derived analytically. Technology adoptions in the manufacturing sector and transportation sector are reinforcing, and multiple equilibria may exist. Firms choose more advanced technologies and the prices decrease when the size of the population is larger.
Rights
© 2014 Higher Education Press, All Rights Reserved.
Included with the kind written permission of the publisher.
Original Publication Citation
Zhou, H. (2014). International trade with increasing returns in the transportation sector. Frontiers of Economics in China, 9(4), 606-633. https://doi.org/10.3868/s060-003-014-0028-0
Repository Citation
Zhou, Haiwen, "International Trade with Increasing Returns in the Transportation Sector" (2014). Economics Faculty Publications. 61.
https://digitalcommons.odu.edu/economics_facpubs/61