Competition for firms in an oligopolistic industry : the impact of economic integration

Haufler, A. and Wooton, I. (2010) Competition for firms in an oligopolistic industry : the impact of economic integration. Journal of International Economics, 80 (2). pp. 239-248. ISSN 0022-1996 (https://doi.org/10.1016/j.jinteco.2009.10.002)

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Abstract

We set up a model of generalised oligopoly where two countries of different size compete for an exogenous, but variable, number of identical firms. The model combines a desire by national governments to attract internationally mobile firms with the existence of location rents that arise even in a symmetric equilibrium where firms are dispersed. As economic integration proceeds, equilibrium taxes initially decline, but then rise again as trade costs fall even further. A range of trade costs is identified where economic integration raises the welfare of the small country, but lowers welfare in the large country.

ORCID iDs

Haufler, A. and Wooton, I. ORCID logoORCID: https://orcid.org/0000-0001-5084-6379;
CORE (COnnecting REpositories)