Monopolistic competition and international trade theory

J. Peter Neary

No 200025, Working Papers from School of Economics, University College Dublin

Abstract: Almost twenty-five years after the appearance of Dixit and Stiglitz’s paper on monopolistic competition and optimum product diversity, I try to take stock of the progres which has been made in applying their approach to international trade theory. I review the principal applications to trade theory and present a new one: by embedding DS preferences in a specific-factors framework, I sketch a model which shows how multinational corporations can emerge even between countries with similar factor endowments. Finally, I address some limitations of the approach, including its treatment of variety, returns to scale, entry and firms’ strategies.

Keywords: Dixit-Stiglitz model; International trade with increasing returns and product differentiation; Monopolistic competition; Multinational corporations; International trade; Monopolistic competition; International business enterprises (search for similar items in EconPapers)
JEL-codes: F10 F12 F23 (search for similar items in EconPapers)
Date: 2000-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://hdl.handle.net/10197/1254 First version, 2000 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucn:wpaper:200025

Access Statistics for this paper

More papers in Working Papers from School of Economics, University College Dublin Contact information at EDIRC.
Bibliographic data for series maintained by Nicolas Clifton ().