Yildiz, Halis Murat (2012): Hub and Spoke Trade Agreements under Oligopoly with Asymmetric Costs. Forthcoming in: Journal of International Trade and Economic Development
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Using an oligopoly model of trade with asymmetric costs, we study the individual and world welfare implications of a hub and spoke trade agreement where the hub country is more efficient than spoke countries. Under a hub and spoke trade regime, the hub country can benefit at the expense of the spokes relative to free trade. Furthermore, if the hub is sufficiently efficient compared to the spokes, such a regime can yield higher global welfare than free trade. Preferential treatment of the efficient hub country in its export markets improves world welfare because it helps allocate a larger share of the world's output to a low cost location.
|Item Type:||MPRA Paper|
|Original Title:||Hub and Spoke Trade Agreements under Oligopoly with Asymmetric Costs|
|Keywords:||oligopoly, hub and spoke trade agreements, global free trade|
|Subjects:||F - International Economics > F1 - Trade > F13 - Trade Policy; International Trade Organizations
F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies
|Depositing User:||Halis Murat Yildiz|
|Date Deposited:||07. Feb 2012 15:04|
|Last Modified:||14. Feb 2013 07:20|
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