Trade and the Environment: Spatial Separation under Product Differentiation

• Suga Nobuhito

  Hokkaido University

• Tawada Makoto

  Nagoya University

Abstract

  This paper presents a two-country model of monopolistic competition in which production of differentiated products in the manufacturing sector lowers productivity in the agricultural sector through a cross-sector pollution externality. We show that free trade raises the spatial separation of the incompatible industries and is possibly harmful to the country that becomes a net exporter of the manufacturing products. Also, we reveal that with product differentiation, trade only in the manufacturing products can be the most beneficial trade regime for the country holding a comparative advantage in those products.

Journal

• The International Economy

  The International Economy 2010 (14), 95-112, 2010

  The Japan Society of International Economics

Keywords

• Trade
• Pollution
• Product differentiation

Details

• CRID: 1390001205411848192
• NII Article ID: 130004562646
• NII Article ID: 40018712900
• NII Book ID: AA12436053
• DOI: 10.5652/internationaleconomy.ie2010.06.s.t
• ISSN: 18844367
• ISSN: 21866074
• NDL BIB ID: 11002199
• Web Site: https://ndlsearch.ndl.go.jp/books/R000000004-I11002199
• Text Lang: en
• Data Source:
  • JaLC
  • NDL
  • Crossref
  • CiNii Articles
  • KAKEN
• Abstract License Flag: Disallowed