Contrary to predictions from traditional comparative advantage analysis, a class of models with imperfect competition predicts intra-industry trade in homogeneous goods. Brander and Krugman offer a model with two countries and one firm in each country which generates the outcome that both firms dump into the export market (reciprocal dumping). The present paper determines the extent to which higher dimensionality alters this outcome by introducing a model with several firms in each of several countries. It is shown that dumping is universal. Thus, whenever trade occurs dumping occurs. Copyright 1999 by Blackwell Publishing Ltd.
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Volume (Year): 7 (1999) Issue (Month): 4 (November) Pages: 580-89 Download reference. The following formats are available: HTML
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