Trade Liberalisation, Health Care and International Fragmentation: The Role of Health Capital Mobility

This paper delves into the complex relationship between health trade through international fragmentation and health trade through commercial presence. A neo-classical full employment four sector static general equilibrium model has been developed, where the three sectors produce final products except the health intermediate goods producing sector. The paper shows that expansion of health trade through commercial presence implies, under some reasonable conditions, enhancement of the volume of health trade through international fragmentation. It also shows that the composite volume of trade in health services through international fragmentation and commercial presence increases the size of the health care in our stylised small open economy.