 The pro-competitive effects of international trade: theoryDevashish Mitra Chapter 40 in Elgar Encyclopedia of International Trade, 2026, pp 207-211 from Edward Elgar Publishing Abstract: This entry presents a short, analytical survey of important theoretical work on the pro-competitive effects of trade: the destruction of the monopoly power of domestic import-competing firms and the associated welfare effects. The entry discusses a large trade literature that provides rigorous theoretical arguments in support of the pro-competitive effects of trade, which are also supported by empirical work. This entry looks at how these arguments work in different market structures and under the alternative assumptions of homogeneous versus heterogeneous firm productivity and constant versus variable elasticity of substitution. More recent work in this literature argues persuasively that a positive welfare impact of the pro-competitive effects of trade should not be taken as given. This impact can change depending on the responses of foreign firms selling in the domestic market. This entry ends with a discussion of the small literature on the relationship between the pro-competitive effects of trade and productivity growth, and possible areas of future research. Keywords: Trade Liberalization; Markups; Monopoly Power; Welfare; Imperfect Competition; Productivity (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:23076_41 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Chapters from Edward Elgar Publishing |
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