Product Differentiation and Trade
Jiancai Pi and
Fan Yanwei
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Fan Yanwei: Department of Economics, Nanjing University, Nanjing, P.R. China
The B.E. Journal of Theoretical Economics, 2024, vol. 24, issue 1, 235-261
Abstract:
This paper analyzes the impacts of product differentiation in general oligopolistic equilibrium with trade. With constant wages, when product differentiation increases, the extensive margins of home and foreign exports decrease, and the domestic and foreign scopes of variety in each industry increase unambiguously. However, the impact of product differentiation on the labor requirement of each firm is mixed. In general equilibrium, an increment of product differentiation increases the wage rate unambiguously if the total variety of goods is large enough in all industry. However, if all firms are single-product ones, an increment of product differentiation increases the wage rate unambiguously in general equilibrium.
Keywords: product differentiation; multi-product firms; single-product firms; trade; general oligopolistic equilibrium (search for similar items in EconPapers)
JEL-codes: F10 F12 L13 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejtec:v:24:y:2024:i:1:p:235-261:n:14
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DOI: 10.1515/bejte-2023-0016
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