This paper explores the effects of innovation efficiency on technology gap and product diversity between a leading firm and its competitor. Our analysis shows some interesting results: when innovation efficiency is sufficiently large and increases, the leading firm may expand technology gap, and...

The paper develops a two-country monopolistic competition model of trade featuring country-specific consumer tastes. The accounting for heterogeneity in tastes is achieved by assuming different elasticities of substitution in the CES utility function for different country consumers. The proposed...

Despite the fact that many modern preferential trade agreements include commitments to foreign investors in imperfectly competitive services sectors, the literature has not established conditions under which these agreements are beneficial or harmful. The authors fill that void by developing a...

This study proposes an economic growth model with perfectly competitive and monopolistic competitive market structures. Our model is based on two core models in two mainstreams of economic theories. One is the Solow model in neoclassical growth theory. The other one is the Dixit-Stiglitz model...