A Simple Model of Foreign Brand Penetration under Monopolistic Competition

Arbeitspapier

The main purpose of this study is to illustrate, with a simple monopolistic competition trade model, how trade liberalization (i.e., a decline in trade costs) can affect domestic entrepreneurs’ decisions between domestic brands and foreign brands, and thus the degree of foreign brand penetration. It is shown that, as trade costs decrease, more entrepreneurs choose to provide foreign brands. However, the impact of trade liberalization (in terms of changes in profit levels) becomes smaller as more entrepreneurs switch to foreign brands.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: EERI Research Paper Series ; No. 14/2009

Classification and Topics

• Classification: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
• Subject: Foreign brand penetration ; trade liberalization ; monopolistic competition

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kikuchi, Toru
• Event: Veröffentlichung
• (who): Economics and Econometrics Research Institute (EERI)
• (where): Brussels
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/142546
• Last update: 10.03.2025, 11:42 AM CET