IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/2883.html
   My bibliography  Save this paper

Empirical Research on Trade Liberalization With Imperfect Competition: A Survey

Author

Listed:
  • J. David Richardson

Abstract

This paper attempts a synthetic census of the calibration/counterfactual style of empirical research on the benefits of trade liberalization with imperfect competition and scale economies. Computable-general-equilibrium studies are surveyed, as are a large number of partial-equilibrium studies in the same style. Microeconomic foundations common to almost all of the studies are discussed algebraically, and the corresponding general-equilibrium structure is discussed graphically. The first typical conclusion from the studies surveyed is that calculated gains in national purchasing power are usually two to three times the size of those estimated in traditional frameworks with perfect competition. Only occasionally are welfare losses calculated from trade liberalization, although such losses are quite possible in theory, as a large recent literature has shown. The second typical conclusion is that calculated adjustment pressures from trade liberalization are considerably higher than implied in most commentary, and higher also than estimates from traditional models. Adjustment pressures describe stimuli for workers to shift activities, for firms to grow or die, for industries to expand or contract, and for trading-partner shares to be altered.

Suggested Citation

  • J. David Richardson, 1989. "Empirical Research on Trade Liberalization With Imperfect Competition: A Survey," NBER Working Papers 2883, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:2883 Note: ITI IFM
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w2883.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Peter Cory & Mark Horridge, 1985. "A Harris-style miniature version of ORANI," Centre of Policy Studies/IMPACT Centre Working Papers op-54, Victoria University, Centre of Policy Studies/IMPACT Centre.
    2. Feenstra, Robert C., 1989. "Symmetric pass-through of tariffs and exchange rates under imperfect competition: An empirical test," Journal of International Economics, Elsevier, pages 25-45.
    3. Norton, R D, 1986. "Industrial Policy and American Renewal," Journal of Economic Literature, American Economic Association, pages 1-40.
    4. Grossman, Gene M & Helpman, Elhanan, 1989. "Product Development and International Trade," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1261-1283, December.
    5. Harris, Richard, 1984. "Applied General Equilibrium Analysis of Small Open Economies with Scale Economies and Imperfect Competition," American Economic Review, American Economic Association, pages 1016-1032.
    6. Tybout, James & de Melo, Jamie & Corbo, Vittorio, 1991. "The effects of trade reforms on scale and technical efficiency : New evidence from Chile," Journal of International Economics, Elsevier, pages 231-250.
    7. Richard G. Harris & Victoria Kwakwa, 1989. "The 1988 Canada-United States Free Trade Agreement: A Dynamic General Equilibrium Evaluation of the Transition Effects," Working Papers 744, Queen's University, Department of Economics.
    8. Dixit, Avinash K. & Grossman, Gene M., 1986. "Targeted export promotion with several oligopolistic industries," Journal of International Economics, Elsevier, pages 233-249.
    9. Tybout, James & de Melo, Jamie & Corbo, Vittorio, 1991. "The effects of trade reforms on scale and technical efficiency : New evidence from Chile," Journal of International Economics, Elsevier, pages 231-250.
    10. Cox, David & Harris, Richard, 1985. "Trade Liberalization and Industrial Organization: Some Estimates for Canada," Journal of Political Economy, University of Chicago Press, vol. 93(1), pages 115-145, February.
    11. Laussel, Didier & Montet, Christian & Peguin-Feissolle, Anne, 1988. "Optimal trade policy under oligopoly : A calibrated model of the Europe-Japan rivalry in the EEC car market," European Economic Review, Elsevier, vol. 32(7), pages 1547-1565, September.
    12. Xiaokai Yang, 2006. "Development, Structural Changes And Urbanization," World Scientific Book Chapters,in: Inframarginal Contributions To Development Economics, chapter 7, pages 137-166 World Scientific Publishing Co. Pte. Ltd..
    13. Daltung, Sonja & Eskeland, Gunnar & Norman, Victor D, 1987. "Optimum Trade Policy Towards Imperfectly Competitive Industries: Two Norwegian Examples," CEPR Discussion Papers 218, C.E.P.R. Discussion Papers.
    14. Levinsohn, James & Feenstra, Robert, 1990. "Identifying the competition," Journal of International Economics, Elsevier, pages 199-215.
    15. Krishna, Kala, 1989. "Trade restrictions as facilitating practices," Journal of International Economics, Elsevier, pages 251-270.
    16. Sven W. Arndt & J. David Richardson, 1987. "Real-Financial Linkages Among Open Economies," NBER Working Papers 2230, National Bureau of Economic Research, Inc.
    17. Feenstra, Robert C., 1989. "Symmetric pass-through of tariffs and exchange rates under imperfect competition: An empirical test," Journal of International Economics, Elsevier, pages 25-45.
    18. Smith, Alasdair & Venables, Anthony J., 1988. "Completing the internal market in the European Community : Some industry simulations," European Economic Review, Elsevier, vol. 32(7), pages 1501-1525, September.
    19. Markusen, James R. & Venables, Anthony J., 1988. "Trade policy with increasing returns and imperfect competition : Contradictory results from competing assumptions," Journal of International Economics, Elsevier, pages 299-316.
    20. Brown, Drusilla K., 1987. "Tariffs, the terms of trade, and national product differentiation," Journal of Policy Modeling, Elsevier, vol. 9(3), pages 503-526.
    21. Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, pages 1007-1051.
    22. Caves, Richard E., 1985. "International trade and industrial organization: Problems, solved and unsolved," European Economic Review, Elsevier, vol. 28(3), pages 377-395, August.
    23. Dixit, Avinash K. & Grossman, Gene M., 1986. "Targeted export promotion with several oligopolistic industries," Journal of International Economics, Elsevier, pages 233-249.
    24. Nguyen, Trien T & Wigle, Randall M, 1991. "Three Variants of the Whalley Model of Global Trade," Empirical Economics, Springer, pages 121-137.
    25. Scott, John T, 1982. "Multimarket Contact and Economic Performance," The Review of Economics and Statistics, MIT Press, vol. 64(3), pages 368-375, August.
    26. Jean-Marc Burniaux & François Delorme & Ian Lienert & John P. Martin & Peter Hoeller, 1988. "Quantifying the Economy-Wide Effects of Agricultural Policies: A General Equilibrium Approach," OECD Economics Department Working Papers 55, OECD Publishing.
    27. Paul R. Krugman, 1985. "Increasing Returns and the Theory of International Trade," NBER Working Papers 1752, National Bureau of Economic Research, Inc.
    28. Smith, Alasdair & Venables, Anthony J, 1988. "Counting the Cost of Voluntary Export Restrictions in the European Car Market," CEPR Discussion Papers 249, C.E.P.R. Discussion Papers.
    29. Sven W. Arndt & J. David Richardson (ed.), 1987. "Real-Financial Linkages among Open Economies," MIT Press Books, The MIT Press, edition 1, volume 1, number 026251172x, January.
    30. James E. Anderson, 1988. "The Relative Inefficiency of Quotas," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511789, January.
    31. Baldwin, Richard, 1990. "Hysteresis in Trade," Empirical Economics, Springer, pages 127-142.
    32. Elie Appelbaum & Ulrich R. Kohli, 1979. "Canada-United States Trade: Tests for the Small-Open-Economy Hypothesis," Canadian Journal of Economics, Canadian Economics Association, vol. 12(1), pages 1-14, February.
    33. Nguyen, T.T & Wigle, R.M., 1988. "Trade Liberalization With Imperfect Competition: The Large And Small Of It," Working Papers 89128, Wilfrid Laurier University, Department of Economics.
    34. Don, H. & Gunasekera, B. H. & Tyers, Rod, 1990. "Imperfect competition and returns to scale in a newly industrialising economy : A general equilibrium analysis of Korean trade policy," Journal of Development Economics, Elsevier, pages 223-247.
    35. Dani Rodrik, 1988. "Imperfect Competition, Scale Economies, and Trade Policy in Developing Countries," NBER Chapters,in: Trade Policy Issues and Empirical Analysis, pages 109-144 National Bureau of Economic Research, Inc.
    36. Harrison, Glenn W. & Jones, Richard & Kimbell, Larry J. & Wigle, Randal, 1993. "How robust is applied general equilibrium analysis?," Journal of Policy Modeling, Elsevier, vol. 15(1), pages 99-115, February.
    37. Robert E. Baldwin, 1988. "Trade Policy Issues and Empirical Analysis," NBER Books, National Bureau of Economic Research, Inc, number bald88-2, January.
    38. Helpman, Elhanan, 1984. "Increasing returns, imperfect markets, and trade theory," Handbook of International Economics,in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 7, pages 325-365 Elsevier.
    39. Venables, Anthony J, 1985. "International Trade, Trade and Industrial Policy and Imperfect Competition: A Survey," CEPR Discussion Papers 74, C.E.P.R. Discussion Papers.
    40. Catherine L. Mann, 1986. "Prices, profit margins, and exchange rates," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), pages 366-379.
    41. Krishna, Kala, 1989. "Trade restrictions as facilitating practices," Journal of International Economics, Elsevier, pages 251-270.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Baldwin, Robert E, 1992. "Are Economists' Traditional Trade Policy Views Still Valid?," Journal of Economic Literature, American Economic Association, pages 804-829.
    2. Lang, Kevin, 1998. "The Effect of Trade Liberalization on Wages and Employment: The Case of New Zealand," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 792-814, October.
    3. Gernot Klepper, 1994. "Industrial Policy in the Transport Aircraft Industry," NBER Chapters,in: Empirical Studies of Strategic Trade Policy, pages 101-130 National Bureau of Economic Research, Inc.
    4. Yamazaki, Fumiko & Paarlberg, Philip L. & Thursby, Marie, 1992. "The Conduct of the World Soybean Processing Industry," Occasional Papers 233092, Regional Research Project NC-194: Organization and Performance of World Food Systems.
    5. Keith Head & Barbara J. Spencer, 2017. "Oligopoly in International Trade: Rise, Fall and Resurgence," NBER Working Papers 23720, National Bureau of Economic Research, Inc.

    More about this item

    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:nbr:nberwo:2883. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.