Middlemen Margins and Globalization

@inproceedings{Bardhan2013MiddlemenMA,
  title={Middlemen Margins and Globalization},
  author={Pranab K. Bardhan and Dilip Mookherjee and Masatoshi Tsumagari},
  year={2013}
}
We provide a competitive theory of middlemen or entrepreneurs who develop brand-name reputations necessary to overcome product quality moral hazard problems, embedded in a Heckscher-Ohlin model of North-South trade. Agents with heterogeneous entrepreneurial abil- ities sort into different sectors and occupations, with endogenous inter- sectoral mobility. In some contexts competitive equilibrium is charac- terized by restricted inter-sectoral mobility; bene ts of trade liberal- ization in the… CONTINUE READING

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