Three essays in international trade

This dissertation contains three individually complete essays. These essays are loosely linked by the theme of leadership advantage and international trade. The first essay, "Resource-Allocation Advantage and International Trade," provides a rigorous proof for resource-allocation advantage in international trade under a one-factor framework. Resource-allocation advantage is a mechanism of leadership advantage. The second essay, "Resource-Allocation Advantage and International Trade: A Two-Factor Model," builds a theoretical model for the same under a two-factor framework. The third paper, "Second Nature Advantage, Governmental Strategic Arrangement, and China's Provincial Export Disparity," provides an empirical estimate for the agglomeration of an export-oriented economy, which also provides evidence for leadership advantage. The abstracts are as follows.;The first essay. To incorporate the phenomenon that some nations with a high level of income and national wealth consume certain nontradables that nations with a low level of income and national wealth cannot afford, this paper presents a trade model where there is a nontradable sector. The demand for nontradables is assumed to depend on real income in tradable sectors and the national wealth. A nation with such a nontradable sector enjoys resource-allocation advantage, which can lead to additional gains from trade compared to the situation when there is absence of such advantage. Resource allocation in the nontradable sector is modeled as regulated monopoly, which adjusts the amount of resources allocated to the nontradable sector to improve national welfare. The magnitude of such adjustment by the monopoly is, however, constrained by the maximum demand for nontradables. Consequently, trade equilibrium is a constrained Nash equilibrium.;The second essay. This paper presents a trade model to study resource-allocation advantage in a two-factor framework. Nations that have resource-allocation advantage obtain additional gains from trade compared to when such advantage is absent. Trade equilibrium is established.;The third essay. In the early 1980s, China's central government strategically opened some coastal cities as windows for the international market. Such a strategic arrangement provided for these chosen cities with an initial earlier start; these open cities functioned as a core for agglomeration of export-oriented economic activities. The self-fulfilling expectation begot a second nature advantage for these cities and their adjacent areas. By using provincial export data, this paper estimates a strategic effect that measures the magnitude of the second nature advantage. The strategic effect provides a quantitative evaluation of the effectiveness of such governmental strategic arrangements. In addition, the combination of strategic effects and the coastal effect—which magnifies export volume—provides an explanation for China's provincial export disparity, especially between coastal provinces.