Indirect network effects and the impact of trade liberalization: A note
AbstractIn this note, we examine how trade liberalization affects production structure in the presence of indirect network effects (hardware/software systems). For these purposes we construct a simple two-country model of trade with two incompatible hardware technologies. It is shown that, given that both types of hardware exist before trade liberalization, liberalization and increased intra-industry trade in software products may reduce the variety of hardware technology via intensified network effects. It is also shown that, contrary to the findings of previous studies on intra-industry trade, some consumers may become worse off as the result of trade.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal The Journal of International Trade & Economic Development.
Volume (Year): 18 (2009)
Issue (Month): 4 ()
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Other versions of this item:
- Kazumichi, Iwasa & Kikuchi, Toru, 2008. "Indirect Network Effects and the Impact of Trade Liberalization: A Note," MPRA Paper 8662, University Library of Munich, Germany.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
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