Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 29, 2011 erstellt
Beschreibung:
The purpose of this study is to illustrate, using a simple model of monopolistic competition with multi-product firms, how trade liberalization affects the degree of foreign brand penetration. We model this in terms of the profit incentives for domestic entrepreneurs to choose to offer domestic brands or foreign (imported) brands, and to determine the range of varieties within each brand. As trade costs decrease, in the medium run the provider of each foreign brand will widen its range of varieties, while the provider of each domestic brand will narrow down its range of varieties. However, in the long run, more domestic entrepreneurs choose to become foreign brand providers and the range of each foreign brand becomes narrower, relative to the initial equilibrium