Kikuchi, Toru (2009): A Simple Model of Foreign Brand Penetration under Monopolistic Competition.
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The main purpose of this study is to illustrate, with a simple monopolistic competition trade model, how trade liberalization (i.e., a decline in trade costs) can affect domestic entrepreneurs' decisions between domestic brands and foreign brands, and thus the degree of foreign brand penetration. It is shown that, as trade costs decrease, more entrepreneurs choose to provide foreign brands. However, the impact of trade liberalization (in terms of changes in profit levels) becomes smaller as more entrepreneurs switch to foreign brands.
|Item Type:||MPRA Paper|
|Original Title:||A Simple Model of Foreign Brand Penetration under Monopolistic Competition|
|Keywords:||Foreign brand penetration; trade liberalization; monopolistic competition|
|Subjects:||F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation|
|Depositing User:||Toru Kikuchi|
|Date Deposited:||10. Jul 2009 00:41|
|Last Modified:||15. Feb 2013 21:28|
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