Vertical Production Chain, Trade and Tariffs in a Two-Factor Model


This paper investigates the Heckscher-Ohlin theorem, the Rybczynski theorem, and the Stolper-Samuelson theorem in a two-factor vertical production chain model of trade. For this purpose, capital is introduced into the model of Yano and Dei (2003). A primary analytic device is the economy-wide production curve. This curve is derived under autarky, free trade, and tariffs, respectively.

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