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The Influence of Capital Market Integration on Production and Market Structures

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  • Koop, Michael J.

Abstract

The paper analyzes the effects of increasing capital market integration on production and market structures, trade and capital flows as well as national and global welfare. In order to facilitate the analysis of the integration process, three stages of capital market integration are defined. First, capital is internationally immobile, secondly, capital is partly mobile, and finally perfect capital mobility is considered. The analysis is carried by means of a general equilibrium model of international trade which incorporates the new trade theory as well as aspects of the theory of multinational enterprises. Simulations of each of the three versions of the model for different absolute and relative factor endowments provide insights into the changes that are brought about by capital market integration.

Suggested Citation

  • Koop, Michael J., 2001. "The Influence of Capital Market Integration on Production and Market Structures," Kiel Working Papers 1040, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1040
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    File URL: https://www.econstor.eu/bitstream/10419/17729/1/kap1040.pdf
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    References listed on IDEAS

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    1. Brander, James & Krugman, Paul, 1983. "A 'reciprocal dumping' model of international trade," Journal of International Economics, Elsevier, vol. 15(3-4), pages 313-321, November.
    2. Friedman, James, 1993. "Oligopoly theory," Handbook of Mathematical Economics, in: K. J. Arrow & M.D. Intriligator (ed.), Handbook of Mathematical Economics, edition 4, volume 2, chapter 11, pages 491-534, Elsevier.
    3. James R. Markusen & Anthony J. Venables & Denise Eby Konan & Kevin H. Zhang, 1996. "A Unified Treatment of Horizontal Direct Investment, Vertical Direct Investment, and the Pattern of Trade in Goods and Services," NBER Working Papers 5696, National Bureau of Economic Research, Inc.
    4. Ignatius J. Horstmann & James R. Markusen, 2021. "Endogenous market structures in international trade (natura facit saltum)," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 2, pages 25-45, World Scientific Publishing Co. Pte. Ltd..
    5. James R. MARKUSEN, 2021. "Multinationals, Multi-Plant Economies, And The Gains From Trade," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 1, pages 3-24, World Scientific Publishing Co. Pte. Ltd..
    6. James R. MARKUSEN, 2021. "Factor Movements And Commodity Trade As Complements," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 15, pages 325-340, World Scientific Publishing Co. Pte. Ltd..
    7. James R. Markusen & Anthony J. Venables, 2021. "Multinational firms and the new trade theory," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 3, pages 47-67, World Scientific Publishing Co. Pte. Ltd..
    8. Wong, Kar-yiu, 1986. "Are international trade and factor mobility substitutes?," Journal of International Economics, Elsevier, vol. 21(1-2), pages 25-43, August.
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    Cited by:

    1. Koop, Michael J., 2001. "Capital Income Taxation of Asymmetric Countries," Kiel Working Papers 1041, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    Keywords

    Market Structure; International Trade; Foreign Direct Investment; Multinational Enterprise;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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