The Role of Intra-National Trade in Trade Theory

Yong He (1) , Guangzhen Sun (2)

1 CERDI - Centre d'Études et de Recherches sur le Développement International
2 UMac - University of Macau

This paper explores the implications arising from the heterogeneous firm model for a theory of trade in which intranational trade is an intrinsic part, and international trade is its extension. Due to market competition, intranational trade dynamically leads to an increase in productivity heterogeneity across firms, which strengthens market selection and makes allocation more efficient. It also strengthens comparative advantage, and thus stimulates international trade

Mots clés: Intra-National and International Trade; Heterogeneous Firm Model; Market Selection; Comparative Advantage

Domaines: Economies et finances

Yong He, Guangzhen Sun. The Role of Intra-National Trade in Trade Theory. Theoretical Economics Letters, 2022, 12 (06), pp.1673-1692. ⟨10.4236/tel.[phone]⟩. ⟨halshs-03916051⟩