QUALITY DESIGN COST AND FOREIGN COMPEITION IN A SMALL ECONOMY

Jannett Highfill () and Robert Scott
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Robert Scott: Bradley University

No 1033, International Trade and Finance Association Conference Papers from International Trade and Finance Association

Abstract: Consider an industry where a "home" and a "foreign" firm compete on the basis of both price and quality. Further, suppose cost considerations imply that potential market size is positively related to quality. This paper suggests that it is not necessarily the case that both the home and foreign firm will survive the opening of trade, but if they do world social surplus is greater in trade than in autarky. However, for social surplus to increase in both countries redistribution between countries may be required. Presented at the 15th International Conference,Istanbul, Turkey, May 2005.

Date: 2005-05-18
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Persistent link: https://EconPapers.repec.org/RePEc:bep:itfapp:1033

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