A Simple Model of Foreign Brand Penetration under Monopolistic Competition

Toru Kikuchi

No 910, Discussion Papers from Graduate School of Economics, Kobe University

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 profitt 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: 17pages
Date: 2009-07
New Economics Papers: this item is included in nep-com and nep-ind
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http://www.econ.kobe-u.ac.jp/RePEc/koe/wpaper/2009/0910.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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