A Simple Model of Foreign Brand Penetration under Monopolistic Competition

Toru Kikuchi

EERI Research Paper Series from Economics and Econometrics Research Institute (EERI), Brussels

Abstract: The main purpose of this study is to illustrate, with a simple monopolistic competition trade model, how trade liberalization (i.e., a decline in trade costs) can affect domestic entrepreneurs’ decisions between domestic brands and foreign brands, and thus the degree of foreign brand penetration. It is shown that, as trade costs decrease, more entrepreneurs choose to provide foreign brands. However, the impact of trade liberalization (in terms of changes in profit levels) becomes smaller as more entrepreneurs switch to foreign brands.

Keywords: Foreign brand penetration; trade liberalization; monopolistic competition. (search for similar items in EconPapers)
JEL-codes: F12 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2009
New Economics Papers: this item is included in nep-com and nep-mkt
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http://www.eeri.eu/documents/wp/EERI_RP_2009_14.pdf (application/pdf)

Related works:
Journal Article: A simple model of foreign brand penetration under monopolistic competition (2010)
Working Paper: A Simple Model of Foreign Brand Penetration under Monopolistic Competition (2009)
Working Paper: A Simple Model of Foreign Brand Penetration under Monopolistic Competition (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eei:rpaper:eeri_rp_2009_14

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