Monopolistic competition and international trade theory

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Title: Monopolistic competition and international trade theory
Authors: Neary, J. Peter
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Date: 11-Dec-2000
Online since: 2009-07-20T15:49:45Z
Abstract: Almost twenty-five years after the appearance of Dixit and Stiglitz’s paper on monopolistic competition and optimum product diversity, I try to take stock of the progres which has been made in applying their approach to international trade theory. I review the principal applications to trade theory and present a new one: by embedding DS preferences in a specific-factors framework, I sketch a model which shows how multinational corporations can emerge even between countries with similar factor endowments. Finally, I address some limitations of the approach, including its treatment of variety, returns to scale, entry and firms’ strategies.
Funding Details: Economic and Social Research Council (ESRC)
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP00/25
Keywords: Dixit-Stiglitz modelInternational trade with increasing returns and product differentiationMonopolistic competitionMultinational corporations
Subject LCSH: International trade
Monopolistic competition
International business enterprises
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Language: en
Status of Item: Not peer reviewed
Conference Details: Presented to the conference on The Monopolistic Competition Revolution after Twenty-Five Years, University of Groningen, 30-31 October 2000
Appears in Collections:Economics Working Papers & Policy Papers

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