Discussion Papers 2016
CIRJE-F-1023 | "Multiproduct Oligopoly and Trade Between Asymmetric Countries" |
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Author Name | Cheng, Yi-Ling and Takatoshi Tabuchi |
Date | September 2016 |
Full Paper | |
Remarks | Forthcoming in Review of International Economics. |
Abstract |
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This paper develops a general equilibrium model of oligopolistic multiproduct firms conducting trade between asymmetric countries, in which heterogeneous firms entrants choose their product ranges and outputs. We show that there are fewer exporters in the larger country, and each produces a wider range of products but exports fewer varieties. We also show that while trade liberalization increases the total number of consumed varieties, it decreases the total number of rms and may reduce the product range of each firm. |
Keywords: multiproduct firms, firm heterogeneity, cannibalization effect, product scope. |