Technology, market structure and the gains from trade

• 成果类型: Article
• 署名作者: Impullitti, Giammario; Licandro, Omar; Rendahl, Pontus
• 署名单位: University of Nottingham; Centre for Economic Policy Research - UK; University of Nottingham
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2021.103557
• 发表日期: 2022
• 关键词: Gains from trade; oligopoly; Endogenous markups; Market concentration; INNOVATION; heterogeneous firms

摘要

We study the gains from trade in a model with oligopolistic competition, heterogeneous firms and innovation. Our key finding is that a trade-induced increase in market concentration can be an important source of the gains from trade. Foreign competition puts downward pressure on profitability which reduces the equilibrium number of firms, but increases their size. This rise in concentration increases welfare via two channels: increasing returns in production, and a scale effect on innovation. In a calibrated version of the model we show that concentration is a main driver of the gains from trade, mostly via its stimulating effect on innovation - the contribution of increasing returns is small. Moreover, lowering trade costs reduces the inefficiency produced by reciprocal dumping, leading to substantial gains. In contrast, the associated reduction in markup dispersion has only a negligible effect.(c) 2021 Elsevier B.V. All rights reserved.