Neary, J. PeterJ. PeterNeary2009-07-202009-07-202000-12-11200025http://hdl.handle.net/10197/1254Presented to the conference on The Monopolistic Competition Revolution after Twenty-Five Years, University of Groningen, 30-31 October 2000Almost 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.115128 bytesapplication/pdfenDixit-Stiglitz modelInternational trade with increasing returns and product differentiationMonopolistic competitionMultinational corporationsF12F23F10International tradeMonopolistic competitionInternational business enterprisesWorking Paperhttps://creativecommons.org/licenses/by-nc-sa/1.0/