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Competing Industrial Standards and the Impact of Trade Liberalization:Revised and Enlarged

Author

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  • Toru Kikuchi

    (Graduate School of Economics, Kobe University)

  • Kazumichi Iwasa

    (Kyoto Institute of Economic Research, Kyoto University)

Abstract

The main purpose of this study is to illustrate, with simple trade theory, the relationship between competing industrial standards and trade liberalization. We assume that there are two competing industrial standards in an international context, each of which applies to a group of differentiated products. A product can be used only in combination with other products based on the same industrial standard.We examine the impact of trade liberalization (i.e., a decline in trade costs) on consumers f choice of a standard. It will be shown that the degree of indirect network effects, captured with substitution between differentiated products, plays an important role as a determinant of the impact of trade liberalization.

Suggested Citation

  • Toru Kikuchi & Kazumichi Iwasa, 2009. "Competing Industrial Standards and the Impact of Trade Liberalization:Revised and Enlarged," Discussion Papers 0913, Graduate School of Economics, Kobe University.
    • Handle: RePEc:koe:wpaper:0913
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    References listed on IDEAS

    as
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    2. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
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    5. Kazumichi Iwasa & Toru Kikuchi, 2011. "Software Provision and the Impact of Market Integration," Review of International Economics, Wiley Blackwell, vol. 19(4), pages 685-696, September.
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    14. Iwasa, Kazumichi & Kikuchi, Toru, 2008. "Software Provision and the Impact of Market Integration: A Note," MPRA Paper 9315, University Library of Munich, Germany.
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