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Network Effects and the Impact of Trade Liberalization

  • Toru Kikuchi


    (Kobe University)

  • Chiharu Kobayashi


    (Doshisha University)

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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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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  1. Economides, Nicholas, 1996. "Network externalities, complementarities, and invitations to enter," European Journal of Political Economy, Elsevier, vol. 12(2), pages 211-233, September.
  2. James Brander, 1980. "Intra-Industry Trade in Identical Commodities," Working Papers 380, Queen's University, Department of Economics.
  3. Eli M. Noam, 2001. "Interconnecting the Network of Networks," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262140721, June.
  4. Barrett, Christopher B. & Yang, Yi-Nung, 2001. "Rational incompatibility with international product standards," Journal of International Economics, Elsevier, vol. 54(1), pages 171-191, June.
  5. Shy,Oz, 2001. "The Economics of Network Industries," Cambridge Books, Cambridge University Press, number 9780521800952.
  6. Nicholas Economides, 1997. "The Economics of Networks," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco, vol. 1(0), December.
  7. repec:ebl:ecbull:v:6:y:2005:i:7:p:1-9 is not listed on IDEAS
  8. Gandal, N. & Shy, O., 1996. "Standardization Policy and International Trade," Papers 12-96, Tel Aviv - the Sackler Institute of Economic Studies.
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