IDEAS home Printed from https://ideas.repec.org/p/koe/wpaper/0913.html
   My bibliography  Save this paper

Competing Industrial Standards and the Impact of Trade Liberalization:Revised and Enlarged

Author

Listed:
  • Toru Kikuchi

    (Graduate School of Economics, Kobe University)

  • Kazumichi Iwasa

    (Kyoto Institute of Economic Research, Kyoto University)

Abstract

The main purpose of this study is to illustrate, with simple trade theory, the relationship between competing industrial standards and trade liberalization. We assume that there are two competing industrial standards in an international context, each of which applies to a group of differentiated products. A product can be used only in combination with other products based on the same industrial standard.We examine the impact of trade liberalization (i.e., a decline in trade costs) on consumers f choice of a standard. It will be shown that the degree of indirect network effects, captured with substitution between differentiated products, plays an important role as a determinant of the impact of trade liberalization.

Suggested Citation

  • Toru Kikuchi & Kazumichi Iwasa, 2009. "Competing Industrial Standards and the Impact of Trade Liberalization:Revised and Enlarged," Discussion Papers 0913, Graduate School of Economics, Kobe University.
    • Handle: RePEc:koe:wpaper:0913
    as

    Download full text from publisher

    File URL: http://www.econ.kobe-u.ac.jp/RePEc/koe/wpaper/2009/0913.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chou, Chien-fu & Shy, Oz, 1990. "Network effects without network externalities," International Journal of Industrial Organization, Elsevier, vol. 8(2), pages 259-270, June.
    2. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    3. Lembke, Johan, 2002. "Global Competition and Strategies in the Information and Communications Technology Industry: A Liberal-Strategic Approach," Business and Politics, Cambridge University Press, vol. 4(1), pages 41-69, April.
    4. Kazumichi Iwasa & Toru Kikuchi, 2011. "Software Provision and the Impact of Market Integration," Review of International Economics, Wiley Blackwell, vol. 19(4), pages 685-696, September.
    5. Toru Kikuchi, 2005. "Interconnected communications networks and home market effects," Canadian Journal of Economics, Canadian Economics Association, vol. 38(3), pages 870-882, August.
    6. Murray C. Kemp & Koji Shimomura, 2001. "Gains From Trade in a Cournot–Nash General Equilibrium," The Japanese Economic Review, Japanese Economic Association, vol. 52(3), pages 284-302, September.
    7. Farrell, Joseph & Klemperer, Paul, 2007. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 31, pages 1967-2072, Elsevier.
    8. Chou, Chien-fu & Shy, Oz, 1996. "Do consumers gain or lose when more people buy the same brand," European Journal of Political Economy, Elsevier, vol. 12(2), pages 309-330, September.
    9. Iwasa, Kazumichi & Kikuchi, Toru, 2008. "Software Provision and the Impact of Market Integration: A Note," MPRA Paper 9315, University Library of Munich, Germany.
    10. Toru Kikuchi, 2007. "Network Externalities And Comparative Advantage," Bulletin of Economic Research, Wiley Blackwell, vol. 59(4), pages 327-337, October.
    11. Church, Jeffrey & Gandal, Neil, 1992. "Network Effects, Software Provision, and Standardization," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 85-103, March.
    12. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    13. Neil Gandal, 2002. "Compatibility, Standardization, and Network Effects: Some Policy Implications," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 18(1), pages 80-91, Spring.
    14. repec:hoo:wpaper:e-92-18 is not listed on IDEAS
    15. repec:fth:stanho:e-92-18 is not listed on IDEAS
    16. Kenji Fujiwara, 2005. "Unilateral and Multilateral Gains from Trade in International Oligopoly," The Economic Record, The Economic Society of Australia, vol. 81(255), pages 404-413, December.
    17. Lembke Johan, 2002. "Global Competition and Strategies in the Information and Communications Technology Industry: A Liberal-Strategic Approach," Business and Politics, De Gruyter, vol. 4(1), pages 1-30, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Toru Kikuchi & Kazumichi Iwasa, 2011. "Competing Industrial Standards and the Impact of Trade Liberalization," International Economic Journal, Taylor & Francis Journals, vol. 25(2), pages 269-284.
    2. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, June.
    3. Kazumichi Iwasa & Toru Kikuchi, 2009. "Indirect network effects and the impact of trade liberalization: A note," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 18(4), pages 541-552.
    4. Iwasa, Kazumichi & Kikuchi, Toru, 2007. "Indirect Network Effects, Trade Liberalization, and Excess Standardization," MPRA Paper 4399, University Library of Munich, Germany.
    5. Steiner, Michael & Wiegand, Nico & Eggert, Andreas & Backhaus, Klaus, 2016. "Platform adoption in system markets: The roles of preference heterogeneity and consumer expectations," International Journal of Research in Marketing, Elsevier, vol. 33(2), pages 276-296.
    6. James E. Prieger & Wei-Min Hu, 2006. "An Empirical Analysis of Indirect Network Effects in the Home Video Game Market," Working Papers 06-25, NET Institute, revised Oct 2006.
    7. Christiaan Hogendorn & Stephen Ka Yat Yuen, 2009. "Platform Competition With ‘Must‐Have’ Components," Journal of Industrial Economics, Wiley Blackwell, vol. 57(2), pages 294-318, June.
    8. Bronnenberg, Bart & Dube, Jean-Pierre, 2016. "The Formation of Consumer Brand Preferences," CEPR Discussion Papers 11648, C.E.P.R. Discussion Papers.
    9. Ramon Casadesus‐Masanell & Hanna Hałaburda, 2014. "When Does a Platform Create Value by Limiting Choice?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(2), pages 259-293, June.
    10. Harikesh Nair & Pradeep Chintagunta & Jean-Pierre Dubé, 2004. "Empirical Analysis of Indirect Network Effects in the Market for Personal Digital Assistants," Quantitative Marketing and Economics (QME), Springer, vol. 2(1), pages 23-58, March.
    11. Kim, Jin-Hyuk & Prince, Jeffrey & Qiu, Calvin, 2014. "Indirect network effects and the quality dimension: A look at the gaming industry," International Journal of Industrial Organization, Elsevier, vol. 37(C), pages 99-108.
    12. Oz Shy, 2011. "A Short Survey of Network Economics," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 38(2), pages 119-149, March.
    13. Desruelle, Dominique & Gaudet, Gerard & Richelle, Yves, 1996. "Complementarity, coordination and compatibility: The role of fixed costs in the economics of systems," International Journal of Industrial Organization, Elsevier, vol. 14(6), pages 747-768, October.
    14. Glazer, Amihai & Gradstein, Mark & Ranjan, Priya, 2003. "Consumption variety and urban agglomeration," Regional Science and Urban Economics, Elsevier, vol. 33(6), pages 653-661, October.
    15. repec:ebl:ecbull:v:12:y:2004:i:1:p:1-9 is not listed on IDEAS
    16. Kang, Jin-Su & Downing, Stephen, 2015. "Keystone effect on entry into two-sided markets: An analysis of the market entry of WiMAX," Technological Forecasting and Social Change, Elsevier, vol. 94(C), pages 170-186.
    17. Schmidt, Julia & Steingress, Walter, 2022. "No double standards: Quantifying the impact of standard harmonization on trade," Journal of International Economics, Elsevier, vol. 137(C).
    18. Chaim FERSHTMAN & Neil GANDAL, 2012. "Migration to the Cloud Ecosystem: Ushering in a New Generation of Platform Competition," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(85), pages 109-123, 1st quart.
    19. Toru Kikuchi, 2010. "The Dixit-Stiglitz-Krugman Trade Model: A Geometric Note," Discussion Papers 1006, Graduate School of Economics, Kobe University.
    20. Bart J. Bronnenberg & Jean-Pierre H. Dubé, 2016. "The Formation of Consumer Brand Preferences," NBER Working Papers 22691, National Bureau of Economic Research, Inc.
    21. He, Wei & Li, Mingzhi & Zheng, Jie, 2023. "Switching cost, network externality and platform competition," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 428-443.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:koe:wpaper:0913. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Kimiaki Shirahama The email address of this maintainer does not seem to be valid anymore. Please ask Kimiaki Shirahama to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/fekobjp.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.