Intraindustry Trade Under Vertical Product Differentiation
The paper focuses on trade between two countries where a vertically differentiated commodityis produced by a single firm in each country, operating initially in autarkic conditions. It is assumed that the two countries have overlapping income distributions, giving thus rise, under certain conditions, to two-way trade, i.e., a proper intraindustry trade. It emerges that while consumers always benefit from trade, especially if two-way trade arises, firms may have conflicting preferences on the choice between (i) autarky and trade, as well as (ii) one-way trade and two-way trade.
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- Krishna, Kala, 1990.
"Protection and the Product Line: Monopoly and Product Quality,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(1), pages 87-102, February.
- Kala Krishna, 1985. "Protection and the Product Line: Monopoly and Product Quality," NBER Working Papers 1537, National Bureau of Economic Research, Inc.
- Kala Krishna, 1985. "Tariffs vs. Quotas with Endogenous Quality," NBER Working Papers 1535, National Bureau of Economic Research, Inc.
- Flam, Harry & Helpman, Elhanan, 1987. "Vertical Product Differentiation and North-South Trade," American Economic Review, American Economic Association, vol. 77(5), pages 810-822, December.
- Chang, Winston W & Chen, Fang-yueh, 1994. "Vertically Related Markets: Export Rivalry between DC and LDC Firms," Review of International Economics, Wiley Blackwell, vol. 2(2), pages 131-142, June. Full references (including those not matched with items on IDEAS)
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