International trade and internal organization

Abstract

This paper integrates theories of internal organisation with a model of international trade. We add another dimension ù how decisions regarding which ideas or projects to accept are made ù to the standard trade framework. It is shown that asymmetry in the organisation of economies per se can be a source of comparative advantage and two-way trade. The framework in the paper is flexible enough to be incorporated in most international trade models (irrespective of market structure)