TY  - JOUR
AU  - Antweiler,Werner
AU  - Trefler,Daniel
TI  - Increasing Returns and All That: A View From Trade
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7941
PY  - 2000
Y2  - October 2000
UR  - http://www.nber.org/papers/w7941
L1  - http://www.nber.org/papers/w7941.pdf
N1  - Author contact info:
Werner Antweiler
University of British Columbia
Sauder School of Business
2053 Main Mall
Vancouver, B.C., Canada, V6T 1Z2
E-Mail: werner.antweiler@ubc.ca

Daniel Trefler
Rotman School of Management
University of Toronto
105 St. George Street
Toronto, ON M5S 3E6
CANADA
Tel: 416/946-7945
Fax: 416/978-5433
E-Mail: dtrefler@rotman.utoronto.ca
AB  - Do scale economies contribute to our understanding of international trade? Do international trade flows encode information about the extent of scale economies? To answer these questions we examine the large class of general equilibrium theories that imply Helpman-Krugman variants of the Vanek factor content prediction. Using an ambitious database on output, trade flows, and factor endowments, we find that scale economies significantly increase our understanding of the sources of comparative advantage.  Further, the Helpman-Krugman framework provides a remarkable lens for viewing the general equilibrium scale elasticities encoded in trade flows. In particular, we find that a third of all goods-producing industries are characterized by scale. (The modal range of scale elasticities for this group is 1.10-1.20 and the economy-wide scale elasticity is 1.05.) Implications are drawn for the trade-and-wages debate (skill-biased scale effects) and endogenous growth.
ER  -