This thesis focuses on three issues pertaining to growth, development, and trade between
developed and developing countries.
The first essay develops an endogenous growth model that incorporates Engel’s law into
the preferences. The model shows that the initial distribution of income is crucial to the
outcome. A closed-economy country where most of its population is poor experiences a low rate
of innovation. Income transfers from the rich to the poor can increase the effective labour
supply, thereby enhancing the rate of innovation. Under free trade, only the rich benefit from
trade. The poor are indifferent unless they already can afford to consume the minimum
requirement of food before trade or the minimum requirement becomes affordable after trade by
cheaper imported food. The initial distribution of income influences the trade patterns.
Moreover, income redistribution in a free trade environment also increases the growth rate.
The second essay extends the first one by assuming that the marginal product of labour
of the food sector is decreasing. It shows that an increase in population may decrease the growth
rate if the initial population is large relative to the productivity of the food sector. Moreover, an
increase in one country’s population may reduce that country’s production share of the world’s
innovation and increase its dependency on imported technology.
The last essay analyzes the welfare impact of minimum-export requirements (MERs)
imposed on foreign direct investments. This essay shows that MERs can be Pareto improving
measures to both the source and the host countries. When offshore plants are used by parent
firms to compete with domestic firms in the source country, MERs can improve the host
country’s welfare by inducing the total sales in the source country to rise, thereby reducing the
distortion generated by imperfect competition. The MERs can simultaneously improve the
welfare of the host country by shifting profits of the foreign firms toward the local firms. If the
local firms are absent, the host’s welfare may still be improved if sufficient profits from foreign
operations are retained in the host country. / Arts, Faculty of / Vancouver School of Economics / Graduate
| Identifer | oai:union.ndltd.org:UBC/oai:circle.library.ubc.ca:2429/8978 |
| Date | 11 1900 |
| Creators | Chayun, Tantivasadakarn |
| Source Sets | University of British Columbia |
| Language | English |
| Detected Language | English |
| Type | Text, Thesis/Dissertation |
| Format | 3666243 bytes, application/pdf |
| Rights | For non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use. |
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