On the Persistence of Leadership or Leapfrogging in International Trade

Massimo Motta (), Jacques Thisse and Antonio Cabrales

Cahiers de Recherches Economiques du Département d'économie from Université de Lausanne, Faculté des HEC, Département d’économie

Abstract: When two countries starting from different quality levels (reflecting different conditions on domestic market demands) open to trade, two possible equilibria arise. In the first one, the quality leader maintains its position. In the second, leapfrogging occurs. However, the latter is possible only if the initial quality gap is not too wide. Further, when the risk dominance criterion is used, only the former equilibrium is selected.

Keywords: international trade; product differentiation; country asymmetries; integrated markets; segmented markets; equilibrium section (search for similar items in EconPapers)
JEL-codes: F12 F15 L13 (search for similar items in EconPapers)
Pages: 19 pages
Date: 1996-12
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Citations: View citations in EconPapers (13)

Published in International Economic Review, vol. 38 (4), pp. 809-824

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Related works:
Journal Article: On the Persistence of Leadership or Leapfrogging in International Trade (1997)
Working Paper: On the persistence of leadership or leapfrogging in international trade (1997)
Working Paper: On the Persistence of Leadership or Leapfrogging in International Trade (1995)
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Persistent link: https://EconPapers.repec.org/RePEc:lau:crdeep:9625

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