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Economic integration in vertically differentiated markets

Journal of Economics and Business - SPOUDAI

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Field Value
 
Title Economic integration in vertically differentiated markets
Economic integration in vertically differentiated markets
 
Creator Κωνσταντάτος, Χρήστος
 
Subject Διεθνές εμπόριο; Οικονομική ενοποίηση
International trade; Economic integration; Commerce
 
Description We analyze trade liberalization in a vertically differentiated market with free entry. We
consider two asymmetric countries each having a uniform income distribution of different width
and density. Income distributions have common origin, so the "wider" country is also "richer",
having higher average income.
In the short run integration increases prices in the smaller country while it lowers those in
the larger country (pure price effect).
In the long run, when the fixed cost is quality - specific, the lower quality always increases
in the smaller country while in the larger country it may increase or decrease. The price of the
lower quality falls in both countries, despite quality improvements.
The price of the high quality, a) for high (low) levels of the fixed cost increases in the small
(large) country while it decreases in the large (small) country, b) for intermediate levels of the
fixed cost, falls in both countries
 
Publisher University of Piraeus
 
Date 2002-07-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
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Format application/pdf
 
Identifier http://spoudai.unipi.gr/index.php/spoudai/article/view/1157
 
Source SPOUDAI - Journal of Economics and Business; Vol 52, No 3 (2002); 60-84
2241-424X
1105-8919
 
Language eng
 
Relation http://spoudai.unipi.gr/index.php/spoudai/article/view/1157/1236
 
Rights Copyright (c) 2002 SPOUDAI - Journal of Economics and Business