A Simple Model of Foreign Brand Penetration under Monopolistic Competition

Toru Kikuchi

MPRA Paper from University Library of Munich, Germany

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)
Date: 2009
New Economics Papers: this item is included in nep-mkt
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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:pra:mprapa:16141

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