This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Review: Vol. 91 No. 4 (September 2001)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter

Explore:

AER - All Issues

AER Forthcoming Articles

Increasing Returns versus National Product Differentiation as an Explanation for the Pattern of U.S.-Canada Trade

Article Citation

Head, Keith, and John Ries. 2001. "Increasing Returns versus National Product Differentiation as an Explanation for the Pattern of U.S.-Canada Trade." American Economic Review, 91(4): 858-876.

DOI: 10.1257/aer.91.4.858

Abstract

We evaluate two alternative models of international trade in differentiated products. An increasing returns model where varieties are linked to firms predicts home market effects: increases in a country's share of demand cause disproportionate increases in its share of output. In contrast, a constant returns model with national product differentiation predicts a less than proportionate increase. We examine a panel of U.S. and Canadian manufacturing industries to test the models. Although we find support for either model, depending on whether we estimate based on within or between variation, the preponderance of the evidence supports national product differentiation.

Article Full-Text Access

Full-text Article

Authors

Head, Keith (U British Columbia)
Ries, John (U British Columbia)

JEL Classifications

F12: Models of Trade with Imperfect Competition and Scale Economies
F14: Country and Industry Studies of Trade
L60: Industry Studies: Manufacturing: General


American Economic Review


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AER - All Issues

AER - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us