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Network Effects and the Impact of Trade Liberalization

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  • Toru Kikuchi

    ()
    (Kobe University)

  • Chiharu Kobayashi

    ()
    (Doshisha University)

Abstract

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 intesified competition.

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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 6 (2007)
Issue (Month): 4 ()
Pages: 1-7

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Handle: RePEc:ebl:ecbull:eb-06f10012

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Keywords: network effects;

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  1. Gandal, Neil & Shy, Oz, 2001. "Standardization policy and international trade," Journal of International Economics, Elsevier, Elsevier, vol. 53(2), pages 363-383, April.
  2. Shy,Oz, 2001. "The Economics of Network Industries," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521800952.
  3. repec:ebl:ecbull:v:6:y:2005:i:7:p:1-9 is not listed on IDEAS
  4. Barrett, Christopher B. & Yang, Yi-Nung, 1999. "Rational Incompatibility With International Product Standards," Working Papers, International Agricultural Trade Research Consortium 14597, International Agricultural Trade Research Consortium.
  5. Nicholas Economides, 1997. "The Economics of Networks," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco, Department of Economics, Universidade Federal de Pernambuco, vol. 1(0), December.
  6. Brander, James A., 1981. "Intra-industry trade in identical commodities," Journal of International Economics, Elsevier, Elsevier, vol. 11(1), pages 1-14, February.
  7. Eli M. Noam, 2001. "Interconnecting the Network of Networks," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262140721, December.
  8. Nicholas Economides, 1997. "Network Externalities, Complementarities, and Invitations to Enter," Industrial Organization, EconWPA 9701004, EconWPA.
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