International trade, foreign investment and the formation of the entrepreneurial class.

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Abstract

Examines the argument that free trade may be harmful to less developed countries, because such international competition inhibits the formation of a local entrepreneurial class. Shows that the entrepreneurial class is smaller under free trade than would be first-best optimal in the presence of efficient risk-sharing institutions such as stock markets. Nonetheless, there are potential gains from trade, and any protectionist policy that increases the number of entrepreneurs will have deleterious welfare consequences. -from Author

Original languageAmerican English
JournalUniversity of Stockholm, Institute for International Economic Studies, Seminar Paper
Volume260
StatePublished - 1983

ASJC Scopus subject areas

  • General Environmental Science
  • General Earth and Planetary Sciences

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