Antitrust in Open Economies

Joseph Francois () and Henrik Horn ()

No 5480, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We examine antitrust rules in a two-county general equilibrium trade model, contrasting national and multilateral (cooperative) determination of competition policy, exploring the properties of the policy equilibrium. It is not imperfect competition, but variation in competitive stance between sectors that matters for trading partners. Beggar-thy-neighbor competition policies relate to countries' comparative advantages, and hurt the factor intensively used, or specific to, the imperfectly competitive sector. They also create a competitive advantage for export firms. FDI can be pro-competitive in this context, reducing the scope for beggar-thy-neighbor policies and reducing the gains from a multilateral competition agreement.

Keywords: antitrust policy; competition policy; FDI; merger policy; trade and imperfect competition (search for similar items in EconPapers)
JEL-codes: F12 F3 L4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ind, nep-int, nep-mic and nep-reg
Date: Written 2006-02
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Related works:
Working Paper: Antitrust in Open Economies (2006)
Working Paper: Antitrust in Open Economies (2006)
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