The effects of trade liberalization with spatial markets

Andreas Kopp

No 610, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: It is established that with the reduction of trade barriers the number of competitors on the spatial markets involved increases. This increase has short run consequences for price competition. If the trade liberalisation is anticipated by the domestic producers they will respond by changing the locational pattern as well. A unique locational equilibrium is established from the no further entry condition of the process of sequential location of exporters' outlets in the import markets. The entry process stops if no further entrant can locate between the last entrant and any of the suppliers having entered the market before without being undercut in the price game.

Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:610

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