Testing an Imperfect Competition Model of Trade
Author: Matthew R. Lynde
Publisher:
Published: 1988
Total Pages: 446
ISBN-13:
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Author: Matthew R. Lynde
Publisher:
Published: 1988
Total Pages: 446
ISBN-13:
DOWNLOAD EBOOKAuthor: Isao Kamata
Publisher:
Published: 2010
Total Pages: 0
ISBN-13:
DOWNLOAD EBOOKThis paper proposes an alternative test of the monopolistic competition model of international trade that has an implication for the relationship between the volume of trade and similarity among trading countries in the size of the economy. In the existing literature the model's implication has been tested for aggregate trade, which includes the sectors that are not characterized by product differentiation. In contrast, this paper focuses on trade of differentiated products that the monopolistic competition model directly aims to describe, and derives an equation predicting that the volume of trade in the differentiated sectors will be larger as the trading countries are more similar in GDP and more symmetric in production structure. This prediction is tested using disaggregated data on trade and manufacturing production, employing a non-linear estimation method to handle zero-trade observations. The result shows that the predicted positive correlation between the volume of trade and the size similarity among countries is significant for both aggregate and differentiated sectors, regardless of whether the trade is among OECD or non-OECD countries. This result, contrary to Debaere's (2005) conclusion, brings us back to the puzzle presented by Hummels and Levinsohn (1995). Moreover, the proposed alternative approach in this paper demonstrates the following: (i) trade in the differentiated sectors among OECD countries is very well explained by the monopolistic competition model; however, (ii) for non-OECD countries, the predicted relationship between the volume of trade and the (adjusted) size similarity among countries is more pronounced in the non-differentiated sectors than in the differentiated sectors, which is counter to what the model suggests. The second point suggests that trade flows among non-rich countries may be driven or crucially influenced by some other mechanism than what is described by the monopolistic competition model.
Author: Joseph F. Francois
Publisher:
Published: 1996
Total Pages: 52
ISBN-13:
DOWNLOAD EBOOKAuthor: Alan V. Deardorff
Publisher:
Published: 1982
Total Pages: 102
ISBN-13:
DOWNLOAD EBOOKAuthor: Winston Chang
Publisher: Springer Science & Business Media
Published: 2012-12-06
Total Pages: 276
ISBN-13: 1461522498
DOWNLOAD EBOOKA theoretical analysis of international trade and industrial policy, developing and using new models of trade with imperfect competition. Modeling of imperfect competition within international trade has been difficult until recent breakthroughs in this area, which have provided a more realistic view of the world economy. The book builds on the advances provided by such tools as game theory and the theory of monopolistic competition. The first section covers broad and basic trade issues which arise under imperfect competition. Section two examines implications for trade policy covering issues such as strategic trade policy in static and dynamic settings. Section three deals with various structural issues, such as optimal choice of trade liberalizing policies, the formation of trade blocks, and open dualistic economy with externalities.
Author:
Publisher:
Published: 1984
Total Pages:
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DOWNLOAD EBOOKAuthor: S. B. Rangnekar
Publisher:
Published: 1947
Total Pages: 210
ISBN-13:
DOWNLOAD EBOOKAuthor: James R. Markusen
Publisher: London : Department of Economics, University of Western Ontario
Published: 1986
Total Pages: 48
ISBN-13:
DOWNLOAD EBOOKAuthor: Jeffrey J. Reimer
Publisher:
Published: 2006
Total Pages: 33
ISBN-13:
DOWNLOAD EBOOKAuthor: James R. Markusen
Publisher: London : Department of Economics, University of Western Ontario
Published: 1980
Total Pages: 56
ISBN-13:
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