IMPERFECT COMPETITION, INCREASING RETURNS, AND DIFFERENTIATED PRODUCTS IN INTERNATIONAL TRADE

1992 ◽  
pp. 589-660
Author(s):  
PAUL KRUGMAN
Keyword(s):  
International Trade ◽  
Imperfect Competition ◽  
Increasing Returns ◽  
Differentiated Products

Increasing Returns Versus National Product Differentiation as an Explanation for the Pattern of U.S.–Canada Trade

2001 ◽  
Vol 91 (4) ◽  
pp. 858-876 ◽  
Author(s):  
Keith Head ◽  
John Ries
Keyword(s):  
International Trade ◽  
Product Differentiation ◽  
Manufacturing Industries ◽  
Increasing Returns ◽  
National Product ◽  
Differentiated Products ◽  
Home Market ◽  
Market Effects ◽  
Canadian Manufacturing ◽  
Home Market Effects

We evaluate two alternative models of international trade in differentiated products. An increasing returns model where varieties are linked to firms predicts home market effects: increases in a country's share of demand cause disproportionate increases in its share of output. In contrast, a constant returns model with national product differentiation predicts a less than proportionate increase. We examine a panel of U.S. and Canadian manufacturing industries to test the models. Although we find support for either model, depending on whether we estimate based on within or between variation, the preponderance of the evidence supports national product differentiation. (JEL F12, F15)

Intra-industry and inter-industry trade through the lens of comparative and absolute advantage

2016 ◽  
pp. 112-128
Author(s):  
A. Gnidchenko
Keyword(s):  
International Trade ◽  
Product Quality ◽  
Vital Role ◽  
Increasing Returns ◽  
Traditional View ◽  
Export Diversification ◽  
Industry Trade ◽  
Long Time ◽  
Absolute Advantage

The article surveys the literature that emphasizes the importance of comparative and absolute advantages for intra- and inter-industry trade. Two conclusions follow form the survey. First, unlike the traditional view, intra-industry trade is determined rather by technology than by increasing returns. Second, absolute advantages that have been ignored in international trade models for a long time play a vital role through their linkages with product quality and export diversification. We also discuss a new strand of literature that models international trade with the assumption of non-homothetic preferences.

Trade policy with increasing returns and imperfect competition

1988 ◽  
Vol 24 (3-4) ◽  
pp. 299-316 ◽  
Author(s):  
James R. Markusen ◽  
Anthony J. Venables
Keyword(s):  
Trade Policy ◽  
Imperfect Competition ◽  
Increasing Returns

Economics of Agglomeration

2019 ◽  
Author(s):  
Jacques-François Thisse
Keyword(s):  
Urban Economics ◽  
Spatial Scales ◽  
Consumer Welfare ◽  
Increasing Returns ◽  
Dispersion Force ◽  
Differentiated Products ◽  
Economic Activities ◽  
Trade Off ◽  
Production Factors ◽  
Space Economy

Despite the drop in transport and commuting costs since the mid-19th century, sizable and lasting differences across locations at very different spatial scales remain the most striking feature of the space-economy. The main challenges of the economics of agglomeration are therefore (a) to explain why people and economic activities are agglomerated in a few places and (b) to understand why some places fare better than others. To meet these challenges, the usual route is to appeal to the fundamental trade-off between (internal and external) increasing returns and various mobility costs. This trade-off has a major implication for the organization of the space-economy: High transport and commuting costs foster the dispersion of economic activities, while strong increasing returns act as a strong agglomeration force. The first issue is to explain the existence of large and persistent regional disparities within nations or continents. At that spatial scale, the mobility of commodities and production factors is critical. By combining new trade theories with the mobility of firms and workers, economic geography shows that a core periphery structure can emerge as a stable market outcome. Second, at the urban scale, cities stem from the interplay between agglomeration and dispersion forces: The former explain why firms and consumers want to be close to each other whereas the latter put an upper limit on city sizes. Housing and commuting costs, which increase with population size, are the most natural candidates for the dispersion force. What generates agglomeration forces is less obvious. The literature on urban economics has highlighted the fact that urban size is the source of various benefits, which increase firm productivity and consumer welfare. Within cities, agglomeration also occurs in the form of shopping districts where firms selling differentiated products congregate. Strategic location considerations and product differentiation play a central role in the emergence of commercial districts because firms compete with a small number of close retailers.

scholarly journals Oligopolistic Competition among Providers in the Telecommunication Industry: The Case of Slovakia

2019 ◽  
Vol 9 (3) ◽  
pp. 49
Author(s):  
Katarina Valaskova ◽  
Marek Durica ◽  
Maria Kovacova ◽  
Elena Gregova ◽  
George Lazaroiu
Keyword(s):  
Imperfect Competition ◽  
Market Concentration ◽  
Competitive Environment ◽  
Differentiated Products ◽  
Oligopolistic Competition ◽  
Telecommunication Sector ◽  
The Sustainable Development ◽  
Oligopolistic Market ◽  
Telecom Sector ◽  
Oligopolistic Market Structure

The issue of the paper is devoted to the oligopolistic market structure, which is a popular form of imperfect competition occurring in the current market economies. The main aim of the paper is to quantify the selected oligopolistic structure of the telecom industry in the Slovak market in the period 2013–2017. We subjected the oligopoly to concentration analysis of the market to quantify and assess the competitive environment in which mobile providers are operating. Market concentration was measured while using specific indicators of market concentration CR2, CR3, the Herfindahl-Hirschman Index, Lorenz curve, Gini coefficient, and coefficient of variation, using the information on total revenues of operators, the share of mobile operators on total revenues, number of active customers, and the penetration of SIM cards. The calculated values of the selected market concentration indices in the telecom sector proved that the mobile operators market is highly concentrated. The services that are offered by operators are not identical, and they are differentiated based on price, quality, availability, or the target group of customers. We also identified the entry barriers, which can be categorized to strategic, economic, technical, and time barriers. The Slovak telecom sector is an oligopoly where competitors offer slightly differentiated products; however, the competitive environment in which they operate is highly concentrated and competition needs to be regulated to achieve the sustainable development of the telecommunication sector.

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