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| Author: | Cabrales, A. Motta, M. |
| Title: | Country asymmetries, endogenous product choice and the timing of trade liberalisation |
| Journal: | European Economic Review
2001 : JAN, VOL. 45:1, p. 87-108 |
| Index terms: | TRADE PRODUCT DIFFERENTIATION INTERNATIONAL TRADE |
| Language: | eng |
| Abstract: | The authors analyze the effects of trade liberalization on firms' decisions and profits in a vertical product differentiation model with countries which have different characteristics. Firms decide product specifications at the beginning of the game, in which autarky is followed by trade liberalization (whose date is anticipated). The analysis suggests that a firm located in a large (or rich) country is the likely market leader at the trade equilibrium. |
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