Oligopolistic Competition, Firm Heterogeneity, and the Impact of International Trade
This paper studies the impact of international trade in a general equilibrium model in which heterogeneous firms engage in oligopolistic competition. An increase of the size of the market leads to a decrease of the equilibrium price and an increase of per capita consumption. The opening of international trade leads to an increased degree of competition, a lower price level, and the exit of least efficient firms. Although average profit increases, not all the surviving firms benefit from the opening of international trade.
Volume (Year): 36 (2010 Winter)
Issue (Month): 1 ()
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