This paper discusses critically the links between trade and competition policies, starting with the empirical literature which suggests that liberal trade policies and tight competition policy are, in a loosely defined sense, substitutes. Next, the underpinnings for the “substitution” hypothesis in a strategic environment, whereby trade liberalization may reduce the incentive to enforce anti-tr...

We look at privatization in a general equilibrium model of a small, tariff-distorted, open economy. There is a differentiated good produced by both private and public sector enterprises. A reduction in government production in order to cut losses from such production raises the returns to capital and increases the tariff revenue, which are welfare improving. However, privatization also leads to...

We analyze the effect of the Byrd Amendment, which amended the US Tariff Act of 1930 to allow revenue from antidumping duties to be distributed to domestic import-competing firms. In an international duopoly framework it is shown that it urges the home firm to restrict output so that the foreign firm increases output and that revenue from the duties increases. Consequently, not only the home fi...

There are large deviations in access to telecommunications infrastructure and trading patterns within the East Asian region. We examine how the network externalities of communication activities and trading opportunities interact to determine the structure of comparative advantage. These interactions are examined by constructing a simple two-country, two-good model of trade involving a country-s...

In the model where the choices of technology by firms endogenously determine productivity differences, we investigate the link between factor endowment and the productivity both in the firm and industry levels. We find among others that firms in capital-abundant countries tend to adopt new advanced technologies more in their production processes, and that opening to international trade will not...

Based on Helpman et al. (2004) we propose a simple two-country (Home and Foreign) model with heterogeneous firms to capture the role of FDI via utilizing time zone differences. Two countries are located in different time zones and there is no overlap in daily working hours. It will be shown that productivities of the firms undertaking FDI are higher than the productivities of non-FDI f i r m s ...

This article investigates common economic consequences of population aging and economic integration for agglomeration processes. We introduce demography into the New Economic Geography by generalizing the constructed capital approach to account for changes in the age structure of the population. Interestingly, the level of trade costs triggering catastrophic agglomeration is rather sensitive to...

We construct a model of trade with heterogeneous retailers to examine the effects of trade liberalization on retail market structure, imports and social welfare. We are especially interested in investigating the transmission of lower import prices into consumer prices and the effects of retail market regulation. The paper shows that changes in import prices may have large effects on consumer pr...

We investigate the effects of human capital accumulation on trade and productivity by integrating a micro-founded education and fertility decision of households into a model of international trade with firm heterogeneity. Our theoretical framework leads to two testable implications: i) the export share of a country increases with the education level of its population, ii) the average profitabil...

According to the World Investment Report 2004, the structure of FDI has shifted towards services. Further, the composition of services FDI is also changing from trade and finance to such industries as electricity, water, telecommunications, storage and transportation. In the latter sector the value of FDI stock rose 16-fold between 1990 and 2002. Incorporating a transport sector dominated by mu...