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Antitrust in Open Economies

In: The Political Economy of Antitrust

Author

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  • Joseph Francois
  • Henrik Horn

Abstract

We examine antitrust rules in a two county general equilibrium trade model, contrasting national and multilateral (cooperative) determination of competition policy, exploring the properties of the policy equilibrium. It is not imperfect competition, but variation in competitive stance between sectors that matters for trading partners. Beggar-thy-neighbor competition policies relate to countries’ comparative advantages, and hurt the factor intensively used, or specific to, the imperfectly competitive sector. They also create a competitive advantage for export firms. FDI can be pro-competitive in this context, reducing the scope for beggar-thy-neighbor policies and reducing the gains from a multilateral competition agreement.
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Suggested Citation

  • Joseph Francois & Henrik Horn, 2007. "Antitrust in Open Economies," Contributions to Economic Analysis, in: The Political Economy of Antitrust, pages 463-483, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:ceazzz:s0573-8555(06)82018-3
    DOI: 10.1016/S0573-8555(06)82018-3
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    Citations

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    Cited by:

    1. is not listed on IDEAS
    2. Alberto Salvo, 2010. "Sequential Cross‐border Mergers in Models of Oligopoly," Economica, London School of Economics and Political Science, vol. 77(306), pages 352-383, April.
    3. Joseph Francois & Ian Wooton, 2010. "Market Structure and Market Access," The World Economy, Wiley Blackwell, vol. 33(7), pages 873-893, July.
    4. Chen Pu & Liu Dingming, 2015. "Trade Liberalization and Competition Levels," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 15(1), pages 25-47, January.
    5. Yano, Makoto & Honryo, Takakazu, 2010. "Trade imbalances and harmonization of competition policies," Journal of Mathematical Economics, Elsevier, vol. 46(4), pages 438-452, July.
    6. Dermot Leahy & J. Peter Neary, 2013. "Oligopoly and Trade," Palgrave Macmillan Books, in: Daniel Bernhofen & Rod Falvey & David Greenaway & Udo Kreickemeier (ed.), Palgrave Handbook of International Trade, chapter 7, pages 197-235, Palgrave Macmillan.

    More about this item

    JEL classification:

    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F3 - International Economics - - International Finance

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