Quality, trade, and growth

Research output: Journal PublicationsJournal Article (refereed)

8 Citations (Scopus)

Abstract

This paper analyzes the roles of product quality and increasing returns in international division of labor and economic development. Because the qualities of different intermediate goods are highly complementary in producing the quality of the final good, a poor economy will choose to be in autarky if its average level of human capital is sufficiently low. Thus, the heterogeneity of human capital may hamper the division of labor. Further, by linking quality, trade and growth, this model simultaneously explains the East Asian Miracle and the empirical finding of conditional convergence.
Original languageEnglish
Pages (from-to)271-291
Number of pages21
JournalJournal of Economic Behavior and Organization
Volume55
Issue number2
DOIs
Publication statusPublished - 1 Oct 2004

Keywords

  • Extent of the market
  • Growth
  • Heterogeneity of human capital
  • Quality

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