In the world trading system there has been an increase in unilateral trade and bilateral trade of differentiated products. However, the main trade theories have difficulties providing an explanation for unilateral trade. We show that profit seeking abroad by merchants or countries originates...

Following Smith¡¯s advocacy of free trade and competition, David Ricardo attempts to strengthen his theory of absolute advantage, which excludes from international trade countries which have no advantages over others, by eliminating this weakness. To do so, Ricardo introduces to the economics...