The purpose of this study is to illustrate, using a simple model of monopolistic competition with multi-product firms, how trade liberalization affects the degree of foreign brand penetration. We model this in terms of the profit incentives for domestic entrepreneurs to choose to offer domestic...

In this note, we examine how trade liberalization affects the profits of firms in the presence of network effects. We will show that, contrary to conclusions in the previous literature, trade liberalization between identical countries increases firms profits despite intensified competition.

Indirect network effects exist when the utility of consumers is increasing in the variety of complementary products available for use with an electronic hardware device. In this note, we examine how indirect network effects work as a determinant of trade patterns. For these purposes we construct...

Using a two-country model of monopolistic competition with cross-country technical heterogeneity, this note explores the determinants of comparative advantage. It is shown that trade patterns are determined by a technology index, and that autarky relative prices do not serve as reliable...

This paper proposes a three-country model of business services trade that captures the role of time zones in the division of labor. The connectivity of business service sectors via communications networks (e.g., the Internet) is found to determine the structure of comparative advantage. That is,...

The purpose of this study is to illustrate, with a simple two-country, two-good, two-factor model, how a technological/regulational improvement in one country's distribution sector can affect firms'' location decisions and the nature of the trading equilibrium. It is shown that, through...

Applying Atkeson and Kehoe's (2000) dynamic model to the dynamic Chamberlin-Heckscher-Ohlin approach, we examine the role of the timing of development (e.g., the removal of trade barriers) as a determinant of trade patterns.

The purpose of this study is to illustrate, with a simple three-region (located on a line), two-good (homogeneous good/differentiated high-tech products), two-factor (labor/"footloose" capital) model, how falling transport costs can affect firms' location decisions and trade structure. It is...