Country size, technology, and Ricardian comparative advantage

Abstract

We develop a Ricardian model with heterogeneous firms in which country size and technology play a crucial role in the firm‐level variables. We show that a country with larger size and better technology exhibits higher productivity and lower price–cost margins even under assumptions of C.E.S. preferences and monopolistic competition. Welfare is higher in this country, not only due to the increased product variety but also due to increased competition in a domestic market. We also show that country size and technology impact critically on the intensive margin as well as the extensive margin in the gravity equation.

Pemex in the context of the global oil company: investment policy and lessons learned

“…Figure 2 shows that the period of greatest investment growth corresponds, as in the figure above, to that of 2000-2014. However, there is no evidence of new assets or infrastructure works that have a significant impact on the productivity of the sector (Ara, 2020;Sánchez, 2016;Silva, 2021). This fact has a logical link with the economic policy of those years whose interest focused on specializing Pemex in crude oil, leaving refined products supply to the international market.…”

“…During the period under review, an orthodox view of the international economy prevailed, which interpreted Ricardo's comparative advantage as convenient and anchored the primary export model. However, in several applied models of comparative advantage, faced with asymmetric balances in different trade areas, the possibility of government intervention exists (Toshihiro, 2011;Ara, 2020;Baomin, 2016). In Mexico, as the legal framework was adjusted to allow for entrance of private capital with the energy reform of 2014, that possibility was diluted and the opening policy came to be considered as the only solution to the financial requirements of the sector, which, in other words, was an ideological and erroneous argument, since, just before the reform, oil revenues were booming, as shown in Figures 1 and 2.…”

A Meta-analysis of the Antecedents and Outcomes of Consumer Foreign Country Image Perceptions: The Moderating Role of Macro-level Country Differences

“…Countries high in industrial performance produce and export value-added products, maintain a higher share of high technology-related activities, and have a significant impact on world trade (Halkos et al, 2021). These countries are also characterized by superior welfare due to wider product variety, better product quality, and heightened domestic price competition (Ara, 2020), while at the same time are in a position to produce and sell their products abroad at affordable prices (Hill & Hult, 2019). Scoring high on industrial performance also implies a country with high levels of competence in producing products that can fulfil promises to foreign consumers and communicate trust (Barbarossa et al, 2018).…”