Abstract: Many producer services are knowledge-intensive, requiring a high initial investment in learning, after which the knowledge can be provided to additional users at low cost. A monopolistic-competition type model is developed to analyze these producer services. Trade only in final goods is an imperfect and inferior substitute for trade in the specialized inputs, due to the complementarity between domestic and foreign specialized inputs, or alternatively the gains from an increased division of labor.

　　Subjects: INVESTMENTS; MONOPOLIES; COMMERCE; MONOPOLISTIC competition; DIVISION of labor; PRODUCER cooperatives; INPUT-output analysis; CONSUMER goods; All Other Consumer Goods Rental; Miscellaneous Financial Investment Activities; Investment Advice