Software Provision and the Impact of Market Integration

Iwasa, Kazumichi and Kikuchi, Toru (2008): Software Provision and the Impact of Market Integration. Unpublished.

Abstract

Both deeper market integration and advances in digital technology have driven particularly large decreases in the costs of intermarket software provision. In this note, we first explain the mechanism of how trade costs in uence the software provision decisions of software firms. Then, we investigate the transformation of production/trade patterns given gradually decreasing trade costs for software products. It is shown that, if two incompatible types of hardware exist, deeper market integration may reduce the variety of hardware technologies.

• Item Type: MPRA Paper
• Language: English
• Keywords: software provision; market integration
• Subjects: F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies

References

Anderson, J. E., and E. van Wincoop (2004) "Trade Costs," Journal of Economic Literature, Vol. 42, pp. 691-751.

Behrens, K., Gaigne, C., Ottaviano, G.I.P., and J.-F. Thisse (2007) "Countries, Regions and Trade: On the Welfare Impacts of Economic Integration," European Economic Review, Vol. 51, pp. 1277-1301.