Import Competition and Market Power: Canadian Evidence

Aileen J. Thompson ()
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Aileen J. Thompson: Federal Trade Commission Washington, DC, http://www.ftc.gov/

No 99-14, Carleton Economic Papers from Carleton University, Department of Economics

Abstract: Part of Introduction: A number of international trade models have now been developed that account for imperfect competition. Although some of these models provide insight into situations where trade protection may be welfare improving, most indicate that imperfect competition provides additional sources of gains from trade. Many of these gains result from the “pro-competitive” effect of trade: import competition increases the perceived elasticity of demand for domestic firms, leading them to reduce their mark-ups of price over marginal cost.

Pages: 24 pages
Date: 1999-12, Revised 2000-03
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Published: Carleton Economic Paper

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