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Competing At Home To Win Abroad: Evidence From Japanese Industry

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  • Mariko Sakakibara
  • Michael E. Porter

Abstract

The study explores the influence of domestic competition on international trade performance, using data from a broad sample of Japanese industries. Domestic rivalry is measured directly using marketshare instability rather than employing structural variables such as seller concentration. We find robust evidence that domestic rivalry has a positive and significant relationship with trade performance measured by world export share, particularly when R&D intensity reveals opportunities for dynamic improvement and innovation. Conversely, trade protection reduces export performance. These findings support the view that local competition - not monopoly, collusion, or a sheltered home market - pressures dynamic improvement that leads to international competitiveness. © 2001 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Suggested Citation

  • Mariko Sakakibara & Michael E. Porter, 2001. "Competing At Home To Win Abroad: Evidence From Japanese Industry," The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 310-322, May.
  • Handle: RePEc:tpr:restat:v:83:y:2001:i:2:p:310-322
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