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Competition Policy and International Trade

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  • Levinsohn, J.

Abstract

This paper presents a non-technical discussion of economic issues that arise due to links between competition (or anti-trust) policy and international trade. While recent advances in international trade theory have borrowed heavily from the industrial organization literature, this work has a schizophrenic quality to it. One of the insights that motivated the new trade theory was the observation that many markets were not perfectly competitive. For the case of purely domestic markets, the industrial organization literature provided a foundation for policy advice and most countries have well established public policy regarding competition between firms. While trade theorists have borrowed heavily from the theory of industrial organization, they seem to have ignored the existence of competition policy when investigating trade policy. The two interact in important ways, and pretending that trade policy in imperfectly competitive markets takes place in the absence of any competition policy may lead to inadvertent policy outcomes.
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Suggested Citation

  • Levinsohn, J., 1994. "Competition Policy and International Trade," Working Papers 362, Research Seminar in International Economics, University of Michigan.
    • Handle: RePEc:mie:wpaper:362
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    References listed on IDEAS

    as
    1. Farrell, Joseph & Shapiro, Carl, 1990. "Horizontal Mergers: An Equilibrium Analysis," American Economic Review, American Economic Association, vol. 80(1), pages 107-126, March.
    2. Larson, David A, 1970. "An Economic Analysis of the Webb-Pomerene Act," Journal of Law and Economics, University of Chicago Press, vol. 13(2), pages 461-500, October.
    3. Levinsohn, James, 1993. "Testing the imports-as-market-discipline hypothesis," Journal of International Economics, Elsevier, vol. 35(1-2), pages 1-22, August.
    4. Stephen W. Salant & Sheldon Switzer & Robert J. Reynolds, 1983. "Losses From Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(2), pages 185-199.
    5. Wyn P. Grant, 1989. "Government and Industry," Books, Edward Elgar Publishing, number 188.
    6. Raymond Deneckere & Carl Davidson, 1985. "Incentives to Form Coalitions with Bertrand Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 473-486, Winter.
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    Cited by:

    1. Yongzheng Liu & Guangliang Ye, 2019. "Competition Policy and Trade Barriers: Empirical Evidence from China," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 54(2), pages 193-219, March.
    2. repec:ebl:ecbull:v:6:y:2002:i:5:p:1-7 is not listed on IDEAS
    3. Gasmi, Farid & Hansen, Wendy L. & Laffont, Jean Jacques, 1997. "Une analyse empirique des décisions en matière d’antidumping aux États-Unis," L'Actualité Economique, Société Canadienne de Science Economique, vol. 73(1), pages 423-456, mars-juin.
    4. Joseph F. Francois & Henrik Horn, 1998. "Competition Policy in an Open Economy," Tinbergen Institute Discussion Papers 98-092/2, Tinbergen Institute.
    5. Guash, J. Luis & Rajapatirana, Sarath, 1998. "Total strangers or soul mates? - antidumping and competition policies in Latin America and the Caribbean," Policy Research Working Paper Series 1958, The World Bank.
    6. Alain McLaren, 2015. "Asymmetry in Price Transmission in Agricultural Markets," Review of Development Economics, Wiley Blackwell, vol. 19(2), pages 415-433, May.
    7. Sabiston, David R., 2001. "Le pass-through du taux de change," L'Actualité Economique, Société Canadienne de Science Economique, vol. 77(3), pages 425-454, septembre.
    8. Raff, Horst & Schmitt, Nicolas, 2005. "Endogenous vertical restraints in international trade," European Economic Review, Elsevier, vol. 49(7), pages 1877-1889, October.
    9. Donghyun Park & Jung Hur, 2002. "Exports Under an Import Substitution Trade Regime: An Alternative View," Economics Bulletin, AccessEcon, vol. 6(5), pages 1-7.

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    More about this item

    Keywords

    competition ; international trade;

    JEL classification:

    • F10 - International Economics - - Trade - - - General

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