International Trade and Technological Competition in Markets with Dynamic Increasing Returns
Luca Fontanelli,
Mattia Guerini and
Mauro Napoletano
No 2021-33, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France
Abstract:
We build a simple dynamic model to study the effects of technological learning, market selection and international competition in the determination of export flows and market shares. The model features two countries populated by firms with heterogeneous productivity levels and sales. Market selection in each country is driven by a finite pairwise Polya urn process. We show that market selection leads either to a national or to an international monopoly in presence of a static distribution of firm productivity levels. We then incorporate firm learning and entry-exit in the model and we show that the market structure does not converge to a monopoly. In addition, we show that the extended model is able to jointly reproduce a wide ensemble of stylized facts concerning intra-industry trade, industry and firm dynamics.
Keywords: International trade; industrial dynamics; firm dynamics; market selection; Pólya urn (search for similar items in EconPapers)
JEL-codes: C15 F1 L1 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2021-08
New Economics Papers: this item is included in nep-int, nep-isf and nep-tid
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Citations: View citations in EconPapers (1)
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http://195.220.190.85/GREDEG-WP-2021-33.pdf First version (application/pdf)
Related works:
Journal Article: International trade and technological competition in markets with dynamic increasing returns (2023) 
Working Paper: International trade and technological competition in markets with dynamic increasing returns (2023)
Working Paper: International trade and technological competition in markets with dynamic increasing returns (2023)
Working Paper: International trade and technological competition in markets with dynamic increasing returns (2022) 
Working Paper: International trade and technological competition in markets with dynamic increasing returns (2022) 
Working Paper: International trade and technological competition in markets with dynamic increasing returns (2021) 
Working Paper: International trade and technological competition in markets with dynamic increasing returns (2021) 
Working Paper: International Trade and Technological Competition in Markets with Dynamic Increasing Returns (2021) 
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Persistent link: https://EconPapers.repec.org/RePEc:gre:wpaper:2021-33
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