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Barbara J Spencer - One of the best experts on this subject based on the ideXlab platform.
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intra industry Trade with bertrand and cournot oligopoly the role of endogenous horizontal product differentiation
Research in Economics, 2015Co-Authors: James A. Brander, Barbara J SpencerAbstract:Abstract This paper investigates the effect of endogenous horizontal product differentiation on Trade patterns and the gains from Trade under Bertrand and Cournot oligopoly. If Trade occurs, Bertrand firms always differentiate their products more that Cournot firms. However, sufficiently high differentiation costs can prevent product differentiation. Trade in homogeneous products never takes place under Bertrand competition. Bertrand firms will either differentiate their products or will not export. Cournot firms, however, may Trade in either homogeneous or differentiated products. Product differentiation can significantly increase the gains from Trade under both Cournot and Bertrand oligopoly.
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intra industry Trade with bertrand and cournot oligopoly the role of endogenous horizontal product differentiation
Social Science Research Network, 2015Co-Authors: James A. Brander, Barbara J SpencerAbstract:This paper investigates the effect of endogenous horizontal product differentiation on Trade patterns and the gains from Trade under Bertrand and Cournot oligopoly. Firms differentiate their products to mitigate competition, but only if the investment required is not too high. Investment in product differentiation takes place in a much wider range of cases and results in a greater difference between products under Bertrand than Cournot competition. In our model, Trade in homogeneous products never takes place under Bertrand competition: Bertrand firms export only if they differentiate their products. Cournot firms may Trade in either homogeneous or differentiated products. If there is Trade, consumers tend to be better off with Bertrand than Cournot competition due to greater product differentiation and more aggressive pricing, but higher levels of investment can raise Bertrand profit above Cournot profit and also above the monopoly profit at autarky when investment costs are sufficiently low.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
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intra industry Trade with bertrand and cournot oligopoly the role of endogenous horizontal product differentiation
National Bureau of Economic Research, 2015Co-Authors: James A. Brander, Barbara J SpencerAbstract:This paper investigates the effect of endogenous horizontal product differentiation on Trade patterns and the gains from Trade under Bertrand and Cournot oligopoly. Firms differentiate their products to mitigate competition, but only if the investment required is not too high. Investment in product differentiation takes place in a much wider range of cases and results in a greater difference between products under Bertrand than Cournot competition. In our model, Trade in homogeneous products never takes place under Bertrand competition: Bertrand firms export only if they differentiate their products. Cournot firms may Trade in either homogeneous or differentiated products. If there is Trade, consumers tend to be better off with Bertrand than Cournot competition due to greater product differentiation and more aggressive pricing, but higher levels of investment can raise Bertrand profit above Cournot profit and also above the monopoly profit at autarky when investment costs are sufficiently low.
Jean Imbs - One of the best experts on this subject based on the ideXlab platform.
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Trade finance specialization and synchronization
The Review of Economics and Statistics, 2004Co-Authors: Jean ImbsAbstract:I investigate the determinants of business cycles synchronization across regions. I use both international and intranational data to evaluate the linkages between Trade in goods, Trade in financial assets, specialization and business cycles synchronization in the context of a system of simultaneous equations. In all specifications, the results are as follows. (i) Simultaneity is important, as both Trade and financial openness have a direct and an indirect effect on cycles of synchronization. (ii) A variety of alternative measures of financial integration suggest that economic regions with strong financial links are significantly more synchronized, even though they are also more specialized. (iii) Specialization patterns have a sizeable effect on business cycles, above and beyond their reflection of Intra-Industry Trade and of openness to goods and assets Trade. (iv) The simultaneous approach makes it possible to disentangle the impacts of both inter- and Intra-Industry Trades. The estimated role of Trade is in line with existing models once Intra-Industry Trade is controlled for. Furthermore, Trade-induced specialization has virtually no effect on cycles synchronization. The results obtain in a variety of datasets, measurement strategies and specifications. They relate to a recent strand of International Business Cycles models with incomplete markets and transport costs, and on the empirical side, point to an important omission in the list of criteria defining an Optimal Currency Area, namely specialization patterns.
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Trade finance specialization and synchronization
The Review of Economics and Statistics, 2004Co-Authors: Jean ImbsAbstract:I investigate the determinants of business cycle synchronization across regions. The linkages between Trade in goods, financial openness, specialization, and business cycle synchronization are evaluated in the context of a system of simultaneous equations. The main results are as follows. (i) Specialization patterns have a sizable effect on business cycles. Most of this effect is independent of Trade or financial policy, but directly reflects differences in GDP per capita. (ii) A variety of measures of financial integration suggest that economic regions with strong financial links are significantly more synchronized, even though they also tend to be more specialized. (iii) The estimated role of Trade is closer to that implied by existing models once Intra-Industry Trade is held constant. The results obtain in a variety of data sets, measurement strategies, and specifications. They relate to a recent strand of international business cycle models with incomplete markets and transport costs and, on the empir...
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Trade finance specialization and synchronization
Post-Print, 2004Co-Authors: Jean ImbsAbstract:I investigate the determinants of business cycle synchronization across regions. The linkages between Trade in goods, financial openness, specialization, and business cycle synchronization are evaluated in the context of a system of simultaneous equations. The main results are as follows. (i) Specialization patterns have a sizable effect on business cycles. Most of this effect is independent of Trade or financial policy, but directly reflects differences in GDP per capita. (ii) A variety of measures of financial integration suggest that economic regions with strong financial links are significantly more synchronized, even though they also tend to be more specialized. (iii) The estimated role of Trade is closer to that implied by existing models once Intra-Industry Trade is held constant. The results obtain in a variety of data sets, measurement strategies, and specifications. They relate to a recent strand of international business cycle models with incomplete markets and transport costs and, on the empirical side, point to an important omission in the list of criteria defining an optimal currency area, namely, specialization patterns.
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Trade finance specialization and synchronization
IMF Working Papers, 2003Co-Authors: Jean ImbsAbstract:The paper investigates the determinants of business cycles synchronization across regions. It uses both international and intranational data to evaluate the linkages between Trade in goods, Trade in financial assets, specialization and business cycles synchronization using a system of simultaneous equations. The results are as follows: (i) Simultaneity is important, as both Trade and financial openness have a direct and an indirect effect on cycle synchronization. (ii) A variety of alternative measures of financial integration suggest that regions with strong financial links are significantly more synchronized, though they are also more specialized. (iii) Specialization patterns have a sizable effect on business cycles, beyond their reflection of Intra-Industry Trade, and of openness to goods and assets Trade. (iv) The estimated role of Trade is in line with existing models once Intra-Industry Trade is controlled for. The results relate to a recent strand of international business cycle models with incomplete markets and transport costs, and, on the empirical side, point to an important omission in the usual criteria defining an optimal currency area, namely specialization patterns.
James A. Brander - One of the best experts on this subject based on the ideXlab platform.
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intra industry Trade with bertrand and cournot oligopoly the role of endogenous horizontal product differentiation
Research in Economics, 2015Co-Authors: James A. Brander, Barbara J SpencerAbstract:Abstract This paper investigates the effect of endogenous horizontal product differentiation on Trade patterns and the gains from Trade under Bertrand and Cournot oligopoly. If Trade occurs, Bertrand firms always differentiate their products more that Cournot firms. However, sufficiently high differentiation costs can prevent product differentiation. Trade in homogeneous products never takes place under Bertrand competition. Bertrand firms will either differentiate their products or will not export. Cournot firms, however, may Trade in either homogeneous or differentiated products. Product differentiation can significantly increase the gains from Trade under both Cournot and Bertrand oligopoly.
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intra industry Trade with bertrand and cournot oligopoly the role of endogenous horizontal product differentiation
Social Science Research Network, 2015Co-Authors: James A. Brander, Barbara J SpencerAbstract:This paper investigates the effect of endogenous horizontal product differentiation on Trade patterns and the gains from Trade under Bertrand and Cournot oligopoly. Firms differentiate their products to mitigate competition, but only if the investment required is not too high. Investment in product differentiation takes place in a much wider range of cases and results in a greater difference between products under Bertrand than Cournot competition. In our model, Trade in homogeneous products never takes place under Bertrand competition: Bertrand firms export only if they differentiate their products. Cournot firms may Trade in either homogeneous or differentiated products. If there is Trade, consumers tend to be better off with Bertrand than Cournot competition due to greater product differentiation and more aggressive pricing, but higher levels of investment can raise Bertrand profit above Cournot profit and also above the monopoly profit at autarky when investment costs are sufficiently low.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
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intra industry Trade with bertrand and cournot oligopoly the role of endogenous horizontal product differentiation
National Bureau of Economic Research, 2015Co-Authors: James A. Brander, Barbara J SpencerAbstract:This paper investigates the effect of endogenous horizontal product differentiation on Trade patterns and the gains from Trade under Bertrand and Cournot oligopoly. Firms differentiate their products to mitigate competition, but only if the investment required is not too high. Investment in product differentiation takes place in a much wider range of cases and results in a greater difference between products under Bertrand than Cournot competition. In our model, Trade in homogeneous products never takes place under Bertrand competition: Bertrand firms export only if they differentiate their products. Cournot firms may Trade in either homogeneous or differentiated products. If there is Trade, consumers tend to be better off with Bertrand than Cournot competition due to greater product differentiation and more aggressive pricing, but higher levels of investment can raise Bertrand profit above Cournot profit and also above the monopoly profit at autarky when investment costs are sufficiently low.
Jarko Fidrmuc - One of the best experts on this subject based on the ideXlab platform.
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the endogeneity of the optimum currency area criteria intra industry Trade and emu enlargement
Contemporary Economic Policy, 2004Co-Authors: Jarko FidrmucAbstract:1. INTRODUCTION Countries participating in a currency area face benefits and costs of the common currency. The benefits are directly related to transaction costs in countries' bilateral Trade. Therefore, countries with intensive Trade relations are likely to gain relatively more from the monetary integration. In addition, Frankel and Rose (1997, 1998) hypothesize that business cycles are also becoming more similar across countries having intensive Trade links. This hypothesis is supported by cross-section estimations of the relation between the correlation of business cycles and Trade intensity among Organisation for Economic Co-operation and Development (OECD) countries between 1959 and 1993. Moreover, Fatas (1997) and Hochreiter and Winckler (1995) show that a common European business cycle has been emerging as predicted by the endogeneity hypothesis of optimum currency area (OCA) criteria. Nevertheless, there remains considerable doubt whether there is a causal relationship between Trade links and the correlation of business cycles in the involved countries. Kose et al. (2003) find only weak evidence for the hypothesis that increased Trade and financial flows have increased the synchronization of business cycles. Kenen (2000) notes that the correlation of business cycles may increase with the intensity of Trade links between these countries, but he argues that this does not necessarily mean that asymmetric shocks are reduced as well. Moreover, Hughes Hallett and Piscitelli (2001) show that a currency union may increase cyclical convergence, but only if there is already a sufficient symmetry in the shocks and institutional structure across the countries. Their findings thus support Krugman's (1993) discussion of the implications from the U.S. currency union for the Economic and Monetary Union (EMU) in Europe. In Krugman's view, Trade liberalization facilitates increased specialization according to comparative advantage of countries and possibly a divergence of business cycles in the EMU. Furthermore, Frankel and Rose's work lacks a stronger relation to Trade structure, (1) which should also explain the similarity of business cycles, although they use intraindustry Trade (IIT) as an argument. In particular, the effects of Trade on the convergence of business cycles depend on the degree of industrial specialization induced by the integration. Indeed, Helpman (1987) and Hummels and Levinsohn (1995) find that Trade specialization plays a lesser role for Trade among developed economies. Thus a majority of Trade is observed within the same industries (the so called IIT). This should imply increasing correlation of business cycles between these countries. Therefore, this article tests the OCA endogeneity using bilateral levels of IIT between OECD countries in the 1990s. It is shown that IIT induces the convergence of business cycles between trading partners, but there is no direct relation between business cycle and Trade intensity. As a result, the OCA endogeneity hypothesis is confirmed. However, this finding also underlines the role of the specialization in Trade. Finally, the article asks whether the Central and Eastern European countries (CEECs) should introduce the euro as soon as possible after accession to the European Union (EU), or whether they should do so at a later stage. This question is addressed by applying the endogeneity hypothesis of OCA criteria to ten transition economies (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia). This article applies the relation between the degree of Trade integration, the shares of IIT, and the convergence in business cycles to CEECs and EU countries to predict the degree of business cycle harmonization of CEECs with EU countries in the medium term. This approach reflects the Lucas critique insofar as it considers possible structural changes during the accession of the CEECs to the EU and the EMU. …
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the endogeneity of the optimum currency area criteria intra industry Trade and emu enlargement
Contemporary Economic Policy, 2004Co-Authors: Jarko FidrmucAbstract:This paper tests the endogeneity hypothesis of OCA criteria (Frankel and Rose, 1998) in a cross-section of OECD countries between 1990 and 1999. It is shown that intraindustry Trade actually causes the convergence of business cycles, while there is no direct relation between business cycles and bilateral Trade intensity. As far as intraindustry Trade is positively correlated with Trade, the OCA endogeneity hypothesis is confirmed, although the argumentation follows Krugman (1993). Finally, the endogeneity of OCA criteria implies a comparable degree of business cycle harmonization of CEECs with EU countries as for the current members for the medium term.
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the endogeneity of optimum currency area criteria intraindustry Trade and emu enlargement
2001Co-Authors: Jarko FidrmucAbstract:This paper tests an endogeneity hypothesis of optimum currency area (OCA) criteria (Frankel and Rose, 1998) on a cross-section of OECD countries between 1990 and 1999. The findings indicate that convergence of business cycles relates to Intra-Industry Trade, but has no direct relation between business cycles and bilateral Trade intensity. As far as Intra-Industry Trade is positively correlated with Trade intensities, this result confirms the OCA endogeneity hypothesis. The endogeneity of OCA linkage criteria implies extensive business cycle harmonization between CEECs and EU countries in the medium term.
G Y Han - One of the best experts on this subject based on the ideXlab platform.
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determinants of aggregate energy intensity with consideration of intra industry Trade
Conference on Industrial Electronics and Applications, 2008Co-Authors: C P Liu, G Y HanAbstract:In order to investigate the impact of Trade structure on the aggregate energy intensity besides the traditional factors such as price and technology, this paper establishes a regression model with consideration of Intra-Industry Trade, which is a sound symbol for the Trade structure. Using panel data covering 25 manufacturing industries and the period of 1996~2005 from China, it finds out that the rising of relative energy price, the enhancing of technology level, and the openness contribute significantly to the falling of the aggregate energy intensity, whereas the development of Intra-Industry Trade seems to stimulate the energy consumption, leading to an increasing aggregate energy intensity. It is a meaningful reference for the government.
