Oligopolistic Competition, Firm Heterogeneity, and the Impact of International Trade

Zhou, Haiwen (2010): Oligopolistic Competition, Firm Heterogeneity, and the Impact of International Trade. Published in: Eastern Economic Journal , Vol. 36, No. 1 (2010): pp. 107-119.

Abstract

This paper studies the impact of international trade in a general equilibrium model in which heterogeneous firms engage in oligopolistic competition. An increase of the size of the market leads to a decrease of the equilibrium price and an increase of per capita consumption. The opening of international trade leads to an increased degree of competition, a lower price level, and the exit of least efficient firms. Though average profit increases, not all the surviving firms benefit from the opening of international trade.

• Item Type: MPRA Paper
• Language: English
• Keywords: Firm heterogeneity, oligopolistic competition, international trade, increasing returns to scale
• Subjects: F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation; F - International Economics > F1 - Trade > F15 - Economic Integration

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