IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-06f10012.html
   My bibliography  Save this article

Network Effects and the Impact of Trade Liberalization

Author

Listed:
  • Toru Kikuchi

    (Kobe University)

  • Chiharu Kobayashi

    (Doshisha University)

Abstract

In this note, we examine how trade liberalization affects the profits of firms in the presence of network effects. We will show that, contrary to conclusions in the previous literature, trade liberalization between identical countries increases firms' profits despite intesified competition.

Suggested Citation

  • Toru Kikuchi & Chiharu Kobayashi, 2007. "Network Effects and the Impact of Trade Liberalization," Economics Bulletin, AccessEcon, vol. 6(4), pages 1-7.
    • Handle: RePEc:ebl:ecbull:eb-06f10012
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/pubs/EB/2007/Volume6/EB-06F10012A.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gandal, Neil & Shy, Oz, 2001. "Standardization policy and international trade," Journal of International Economics, Elsevier, vol. 53(2), pages 363-383, April.
    2. Barrett, Christopher B. & Yang, Yi-Nung, 2001. "Rational incompatibility with international product standards," Journal of International Economics, Elsevier, vol. 54(1), pages 171-191, June.
    3. Brander, James A., 1981. "Intra-industry trade in identical commodities," Journal of International Economics, Elsevier, vol. 11(1), pages 1-14, February.
    4. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-440, June.
    5. Eli M. Noam, 2001. "Interconnecting the Network of Networks," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262140721, April.
    6. Shy,Oz, 2001. "The Economics of Network Industries," Cambridge Books, Cambridge University Press, number 9780521800952, October.
    7. Nicholas Economides, 1997. "The Economics of Networks," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco, vol. 1(0), December.
    8. Anderson, Simon P & Donsimoni, M-P & Gabszewicz, J J, 1989. "Is International Trade Profitable to Oligopolistic Industries?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(4), pages 725-733, November.
    9. Economides, Nicholas, 1996. "Network externalities, complementarities, and invitations to enter," European Journal of Political Economy, Elsevier, vol. 12(2), pages 211-233, September.
    10. repec:ebl:ecbull:v:6:y:2005:i:7:p:1-9 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kangsik Choi & Ki‐Dong Lee, 2022. "Strategic delegation and network externalities under export rivalry market," Manchester School, University of Manchester, vol. 90(1), pages 1-19, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:ebl:ecbull:v:6:y:2007:i:4:p:1-7 is not listed on IDEAS
    2. Vitor Trindade & Johannes Moenius, 2007. "Networks, Standards and Intellectual Property Rights," Working Papers 0705, Department of Economics, University of Missouri.
    3. Nicholas Economides & Brian Viard, 2003. "Pricing of Complementary Goods and Network Effects," Working Papers 03-12, New York University, Leonard N. Stern School of Business, Department of Economics.
    4. Fabio Manenti & Ernesto Somma, 2008. "One-Way Compatibility, Two-Way Compatibility and Entry in Network Industries," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 15(3), pages 301-322.
    5. Oz Shy, 2011. "A Short Survey of Network Economics," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 38(2), pages 119-149, March.
    6. Heli Koski & Tobias Kretschmer, 2004. "Survey on Competing in Network Industries: Firm Strategies, Market Outcomes, and Policy Implications," Journal of Industry, Competition and Trade, Springer, vol. 4(1), pages 5-31, March.
    7. Kari Kemppainen, 2004. "Competition and regulation in European retail payment systems," Microeconomics 0404008, University Library of Munich, Germany.
    8. Kemppainen, Kari, 2008. "Integrating European retail payment systems : some economics of SEPA," Research Discussion Papers 22/2008, Bank of Finland.
    9. repec:zbw:bofrdp:2008_022 is not listed on IDEAS
    10. Joan Torrent-Sellens, 2015. "Knowledge Products and Network Externalities: Implications for the Business Strategy," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 6(1), pages 138-156, March.
    11. Kemppainen, Kari, 2008. "Integrating European retail payment systems: some economics of SEPA," Bank of Finland Research Discussion Papers 22/2008, Bank of Finland.
    12. Kazumichi Iwasa & Toru Kikuchi, 2009. "Indirect network effects and the impact of trade liberalization: A note," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 18(4), pages 541-552.
    13. Persson, Lars & Norbäck, Pehr-Johan & Tåg, Joacim, 2013. "Acquisitions, Entry, and Innovation in Network Industries," CEPR Discussion Papers 9585, C.E.P.R. Discussion Papers.
    14. Mitsuru Sunada, 2008. "Network effects with quality change: an empirical analysis of the Japanese mobile telecommunications market, 1995-2001," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(8), pages 657-674.
    15. Marco Guerzoni & Massimiliano Nuccio, 2014. "Music consumption at the dawn of the music industry: the rise of a cultural fad," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 38(2), pages 145-171, May.
    16. Amir, Rabah & Lazzati, Natalia, 2011. "Network effects, market structure and industry performance," Journal of Economic Theory, Elsevier, vol. 146(6), pages 2389-2419.
    17. Iftekhar Hasan & Heiko Schmiedel, 2004. "Do networks in the stock exchange industry pay off? European evidence," International Finance 0405002, University Library of Munich, Germany.
    18. DongJoon Lee & Kangsik Choi & Tatsuhiko Nariu, 2020. "Endogenous vertical structure with network externalities," Manchester School, University of Manchester, vol. 88(6), pages 827-846, December.
    19. Daniel Birke, 2009. "The Economics Of Networks: A Survey Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(4), pages 762-793, September.
    20. Jean-Jacques Herings, P. & Peeters, Ronald & Yang, Michael S., 2010. "Competition against peer-to-peer networks," Information Economics and Policy, Elsevier, vol. 22(4), pages 315-331, December.
    21. Matthew G. Nagler, 2008. "Network Externalities, Mutuality, and Compatibility," Working Papers 08-37, NET Institute, revised Oct 2008.
    22. Lee, DongJoon & Choi, Kangsik, 2018. "The efficiency of competing vertical chains with network externalities," Economics Letters, Elsevier, vol. 168(C), pages 1-5.

    More about this item

    Keywords

    network effects;

    JEL classification:

    • F1 - International Economics - - Trade
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-06f10012. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.