When firms in the same industry located in different regions or countries experience shocks to production costs in their respective industries that are imperfectly correlated, arbitrage opportunities automatically lead to trade. Trade can either stabilize or destabilize the price faced by...

Recent `open-economy industrial organization' literature finds export orientation enhances the weight of post-merger international competitive gains, favouring lenient domestic merger policy. However, mergers seldom generate the `significant synergies' supportive of international competitive...

. I endogenize the carrying capacity of the resource. I find, unlike Brander and Taylor, that trade liberalization may increase the forest stock in the resource-abundant country and may decrease the forest stock in the resource-scarce country. Moreover, the policies primarily aimed at protecting...

In a two-country Hotelling type duopoly model of price competition, we show that parallel import (PI) policy can act as an instrument of strategic trade policy. The home firm's profit is higher when it <i>cannot</i> price discriminate internationally if and only if the foreign market is sufficiently...

tried to resuscitate HOV by introducing a simple Hicks-neutral (HN) factor-productivity adjustment. In this paper, we re-examine this question by estimating factor-specific productivities from the individual technology data of multiple developed and developing countries. We find evidence of...

Constructing a two-good (competitive and imperfectly-competitive goods), two-primary factor (capital and labor) and two-country model of international trade where the imperfectly-competitive sector is subject to increasing returns to scale, we establish an oligopolistic version of the...

Motivated by GATT, we endogenize the formation of a club whose members have to abide by the MFN principle of non-discrimination. The underlying model is that of oligopolistic intraindustry trade. While an MFN club does not alter average tariff levels across countries, it increases aggregate...

The authors examine how U.S. multinational corporations (MNCs) and their Canadian affiliates responded to the substantial bilateral tariff reductions that occurred over the 1983-92 period. Using confidential firm-level data from the Bureau of Economic Analysis, they focus on the MNCs' allocation...

A key element missing from the structural gravity literature is an examination of the implied general equilibrium. By design the gravity equation is adept at predicting bilateral trade flows. To make inferences beyond trade flows, however, the theoretic models should be consistent with other...