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Industrial organization and international trade : some recent developments (English)

This paper explores the relationship between industrial organization and international trade and the several novel features of analysis which the combination of these two fields produces. From the viewpoint of the field of industrial organization, it reviews the theoretical and empirical research which incorporates the influence of international market linkages on domestic market performance. A major emphasis is placed on the constraints imposed by international trade on domestic allocative inefficiencies and the implications of these findings for an appropriate competition policy in small open economies. On the theoretical side, the paper focuses on the allocative decisions and resulting equilibria in imperfectly competitive markets subject to the influence of such international factors as import competition, export rivalry, and the presence of multinational firms. On the empirical front, it seeks to assess the extent to which import competition constrains domestic firm conduct and market performance, the effect of exposure to international trade on the number and size distribution of producers and the resulting technical inefficiency in the national market, and the extent to which export opportunities weaken any collusive arrangements among the domestic oligopolists.




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Kessides,Ioannis N.

Industrial organization and international trade : some recent developments (English). Country Policy Department discussion paper,no. CPD 8432 Washington, D.C. : World Bank Group.