Sugata Marjit
Endogenous Market Structure, Trade Cost Reduction, and Welfare
Marjit, Sugata; Mukherjee, Arijit
Abstract
We show the long-run effects of a trade cost reduction in an oligopolistic industry. If the labor markets are competitive and the products are homogeneous, a lower transportation cost affects neither consumer surplus nor welfare of the importing country under free entry of domestic firms. If the products are imperfect substitutes, a lower transportation cost may reduce consumer surplus and welfare of the importing country. We also show the implications of a domestic labor union, free entry of domestic and foreign firms, integer constraint, and a tariff as the trade cost.
Citation
Marjit, S., & Mukherjee, A. (2015). Endogenous Market Structure, Trade Cost Reduction, and Welfare. Journal of Institutional and Theoretical Economics, 171(3), 493-511. doi:10.1628/093245615x14322754804672
Journal Article Type | Article |
---|---|
Acceptance Date | Feb 8, 2015 |
Publication Date | Sep 1, 2015 |
Deposit Date | Dec 9, 2018 |
Journal | Journal of Institutional and Theoretical Economics JITE |
Print ISSN | 0932-4569 |
Publisher | Mohr Siebeck |
Peer Reviewed | Peer Reviewed |
Volume | 171 |
Issue | 3 |
Pages | 493-511 |
DOI | https://doi.org/10.1628/093245615x14322754804672 |
Public URL | https://nottingham-repository.worktribe.com/output/1394420 |
Publisher URL | https://www.ingentaconnect.com/content/mohr/jite/2015/00000171/00000003/art00006 |
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