IDEAS home Printed from https://ideas.repec.org/a/ris/integr/0270.html
   My bibliography  Save this article

Preferential Trade Agreements, Market Power, and Product Differentiation

Author

Listed:
  • Jensen, Paul E.

    (Drexel University)

  • Madan, Vibhas

    (Drexel University)

Abstract

Preferential trade agreements (PTAs) usually result in increased trade amongst member countries and lower prices within the PTA. Thus the markets are assumed to be “more competitive” because lower prices are taken to imply “decreased market power” due to a reduction in price-cost margins. In this paper we empirically examine the relationship between changes in market power and product differentiation within the context of a duopoly framework with restricted entry. Using industry level trade data from the EEC we show that the formation of a PTA may increase the market power of PTA-exporters and lower the market power of non-PTA exporters. In addition, we show that these market power effects are more pronounced for less differentiated products.

Suggested Citation

  • Jensen, Paul E. & Madan, Vibhas, 2004. "Preferential Trade Agreements, Market Power, and Product Differentiation," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 19, pages 162-181.
    • Handle: RePEc:ris:integr:0270
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Elbehri, Aziz & Hertel, Thomas, 2006. "A Comparative Analysis of the EU-Morocco FTA vs. Multilateral Liberalization," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 21, pages 496-525.

    More about this item

    Keywords

    Preferential trade agreements; Market power;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:integr:0270. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Yunhoe Kim (email available below). General contact details of provider: https://edirc.repec.org/data/desejkr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.