Mobile Capital, Variable Elasticity of Substitution, and Trade Liberalization
研究贸易自由化如何影响贸易模式、企业加价和选址，发现结果取决于出口门槛，并解释了文献中一些矛盾的经验事实。
This article investigates the impact of trade liberalization on trade patterns, firm markups, and firm locations in a two-factor monopolistic competition model that features variable elasticity of substitution by a general additively separable utility. We find that, depending on the relative export hurdles, either direction of one-way trade may occur when trade opens up. Its direction determines the responses of firm-level markups and various home market effects to falling trade costs. Our results show that some important findings in the literature are robust only with particular classes of preferences. We provide a possible rationale for some well-known conflicting empirical facts.