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How Much Does Trade Contribute to Market Structure?

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  • DANIEL MIRZA

Abstract

In general, firm‐level data are not available among foreign sellers to enable researchers to compute market concentration in open markets, and especially trade's contribution to this concentration. We implement a theory‐based procedure from a generalized Brander–Krugman framework that can be used to estimate foreign contribution to market concentration, using industrial trade and activity data only and without any need for firm‐level data. The results suggest a foreign contribution to concentration of around 30%–50% for small European economies and 20%–30% for larger European countries. Market structure is less affected by openness in the USA and Japan.

Suggested Citation

  • Daniel Mirza, 2006. "How Much Does Trade Contribute to Market Structure?," Economica, London School of Economics and Political Science, vol. 73(289), pages 59-74, February.
    • Handle: RePEc:bla:econom:v:73:y:2006:i:289:p:59-74
    DOI: 10.1111/j.1468-0335.2006.00448.x
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    References listed on IDEAS

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    1. Lionel Fontagné & Michaël Freudenberg & Nicolas Peridy, 1997. "Trade Patterns Inside the Single Market," Working Papers 1997-07, CEPII research center.
    2. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    3. Gianmarco Ottaviano & Takatoshi Tabuchi & Jacques-François Thisse, 2021. "Agglomeration And Trade Revisited," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 3, pages 59-85, World Scientific Publishing Co. Pte. Ltd..
    4. Paul Krugman, 1992. "A Dynamic Spatial Model," NBER Working Papers 4219, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Soregaroli, Claudio & Sckokai, Paolo, 2011. "Modelling Agricultural Commodity Markets under Imperfect Competition," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 116012, European Association of Agricultural Economists.
    2. Kai Zhao, 2021. "Competition of International Trade, Technology Spillover, and R&D Innovation," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(2), pages 676-694, June.
    3. Itai Agur, 2010. "Trade Liberalization, Firm Selection, and Variety Growth," Review of International Economics, Wiley Blackwell, vol. 18(3), pages 582-594, August.
    4. Itai Agur, 2006. "Firm Heterogeneity and the Two Sources of Gains from Trade," Economics Working Papers ECO2006/38, European University Institute.

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