Network Effects and the Impact of Trade Liberalization
نویسندگان
چکیده
In this note, we examine how trade liberalization affects the profits of firms in the presence of network effects. We will show that, contrary to conclusions in the previous literature, trade liberalization between identical countries increases firms’ profits despite intensified competition. (JEL Classification: D43, F12, L13) ∗e-mail: [email protected] †We would like to thank David Anderson, Itsuka Hattori and an anonymous referee for very useful comments. The second author is grateful for financial support provided to ‘Academic Frontier’ Project, 2004–2008, by MEXT (Ministry of Education, Culture, Sports and Technology). ‡e-mail:[email protected]
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