Trade Liberalization and the Degree of Competition in International Duopoly

This paper analyzes how a reduction in trade costs influences the possibility for firms to engage in international cartels, and hence how trade liberalization affects the degree of competition. We consider a particular intra‐industry trade model amended to allow for firms producing differentiated products. Our main finding is that trade liberalization may have an anti‐competitive effect. We find that there is no unique relation between a reduction in trade costs and the degree of competition. When products are differentiated, a lowering of trade costs is pro‐competitive if trade costs are initially high, but anti‐competitive if trade costs initially are low. Hence, trade policy is not necessarily a substitute for competition policy.     

Vertical Specialization and International Business Cycle Synchronization*

We explore the impact of vertical specialization—trade in goods across multiple stages of production—on the relationship between trade and business cycle synchronization across countries. We develop an international business cycle model in which the degree of vertical specialization varies with trade barriers. With perfect competition, we show analytically that fluctuations in measured total factor productivity are not linked across countries through trade. In numerical simulations, we find little dependence of business cycle synchronization on trade intensity. An extension of the model to allow for imperfect competition has the potential to resolve these shortcomings.     

近代中国的信贷约束与出口商品质量?--以茶叶贸易为例

近年来,提高出口商品质量已成为提升中国对外贸易竞争力的迫切需要。文章从茶叶贸易中市场主体之间的关系分析入手,剖析了制约近代中国出口茶叶质量的关键力量,进而构建了一个两阶段动态博弈模型,以分析作为贸易和金融中间商的口岸茶栈对茶叶质量改进的影响。研究表明,口岸茶栈是影响近代中国出口茶叶质量的关键因素之一,但其对自身利益的追求与茶叶质量改进之间是冲突的,因而形成了对出口茶叶质量的制约作用。究其原因,最重要的是口岸茶栈与制茶号(生产者)之间难以形成长期的合作关系,进而导致制茶号只能够得到口岸茶栈的短期贷款以保证茶叶数量的供应,而难以获得长期信贷以提升出口茶叶质量。进一步地,文章对近代中国出口茶叶质量低劣的原因进行了更为全面的历史分析,发现出口茶叶质量不仅受制于制茶号改进质量的激励不足,而且受到了来自中间商与金融制度的多重信贷约束。此外,晚清政府无法提供有力的产业政策和财政政策支持也是制约因素之一。文章的结论为当下中国对外贸易“由量到质”的转型和加强供给侧改革提供了一定的启示。     

Trade Intermediation and the Organization of Exporters

Empirical papers show that successful exporting firms either use unaffiliated foreign trade intermediaries or own foreign wholesale subsidiaries. However, conventional trade theory models assume that producers can directly access foreign consumers. We introduce intermediaries in an international trade model where producers differ with respect to productivity as well as regarding their varieties' perceived quality and tradability. Trade intermediation is prone to frictions owing to the absence of enforceable cross‐country contracts while own wholesale subsidiaries require additional capital investment. The sorting pattern of firms depends on their degree of competitive advantage; the equilibrium prevalence of intermediation in the industry depends negatively on the heterogeneity among producers, and the market‐specificity of goods, and positively on expropriation risk. Using sectoral US export data by destination country, we confirm the empirical validity of these predictions.     

服务贸易壁垒与货物贸易壁垒的比较

20世纪90年代以来,服务业已成为全球经济增长最快的部门,全球经济竞争的重点正从货物贸易转向服务贸易。近年货物贸易频频遭遇的技术壁垒已经成了我国发展国际贸易的瓶颈,分析货物贸易壁垒与服务贸易壁垒的规律、异同和应对其的成本和措施,对制定国家贸易战略有着重要的现实意义。     

Trading networks with price-setting agents

In a wide range of markets, individual buyers and sellers trade through intermediaries, who determine prices via strategic considerations. Typically, not all buyers and sellers have access to the same intermediaries, and they trade at correspondingly different prices that reflect their relative amounts of power in the market. We model this phenomenon using a game in which buyers, sellers, and traders engage in trade on a graph that represents the access each buyer and seller has to the traders. We show that the resulting game always has a subgame perfect Nash equilibrium, and that all equilibria lead to an efficient allocation of goods. Finally, we analyze trader profits in terms of the graph structure — roughly, a trader can command a positive profit if and only if it has an “essential” connection in the network, thus providing a graph-theoretic basis for quantifying the amount of competition among traders.     

产业集中度与贸易产业的竞争力

产业的市场集中状况是影响产业贸易竞争力的一个主要因素。文章分析我国贸易产业的集中度状况及其与竞争力的关系,研究得到我国产业集中度低影响了我国工业产品的竞争力,尤其是明显具有规模经济效应产业的竞争力。     

The puzzle of quality upgrading of Chinese exports from the trade liberalization perspective

Trade liberalization could accelerate the process of quality upgrading through the competition effect. However, that the quality of Chinese exports exhibits an opposite performance pattern is puzzling. The present paper uses a framework based on multiproduct firms to analyse the mechanism of how the product quality of exports is affected by trade liberalization to explain this puzzle. The model includes two major mechanisms: the competition effect and the market effect. There is a huge gap in the influence on the product quality of exports between a decrease in tariff barriers and non‐tariff barriers: firms' product quality increases (decreases) when non‐tariff barriers (tariff barriers) fall. The data of Chinese firms from 2001 to 2011 supports this conclusion. Further research reveals that the influence of trade liberalization on the product quality of exports in China varies among different types of firms.     

Quality screening and trade intermediaries: Evidence from China

We examine the quality‐screening role played by intermediaries in international trade, exploiting export data at the product level for Chinese exporters. We uncover substantial heterogeneity among intermediaries, and distinguish two types: generalized and specialized intermediaries. We find strong evidence of a quality‐verification role for specialized intermediaries: they are more prevalent in products with greater quality dispersion among local exporters, and export goods of higher quality than do generalized intermediaries. Our results suggest that specialized intermediaries have the capacity to reduce the incidence of quality problems.     

Economic Integration,Process and Product Innovation,and Relative Skill Demand

The interaction between economic integration, product and process innovation, and relative skill demand is analyzed in a model of international oligopoly. Lower trading barriers increase the degree of foreign competition. The competing enterprises respond by investing more aggressively in lowering marginal costs of production. Moreover, firms reduce the substitutability of their products through additional investment in product innovation. The paper also shows that the relative demand for skilled workers may increase as a result.     

服务贸易壁垒对制造业GVC升级的影响研究：基于跨国面板数据的实证分析

文章基于服务贸易壁垒与制造业服务化的矛盾分析了遭受服务贸易壁垒对制造业global value chains(GVC)升级的影响,并利用2000—2014年的跨国面板数据进行实证检验,得出如下结论:第一,遭受服务贸易壁垒会阻碍制造业GVC升级,降低制造业参与GVC分工的程度,缩短制造业在全球价值链中的生产长度,且遭受服务贸易壁垒会阻碍制造业在GVC中地位的提升,增加制造业出口产品中国内增加值的使用,减少国外增加值的使用;第二,遭受服务贸易壁垒对发展中国家影响大于发达国家,对中高技术行业的影响大于中低计划行业.分要素密集度行业来看,遭受服务贸易壁垒对前向参与GVC生产活动的影响程度大小顺序为:技术密集型行业>资本密集型行业>劳动密集型行业,对后向参与GVC生产活动的影响程度大小顺序为:资本密集型行业>技术密集型行业>劳动密集型行业.     

Trade, Vertical Production Chain, and Competition Policy

The authors build a trade model that renders tractable the process in which imperfect competition in a country's downstream sector affects the rest of the world through international trade. For this purpose, internationally traded goods are viewed as middle products in the vertical chain of production, in which middle products are produced upstream and transformed into final consumption goods downstream. Suppression of competition in a country's downstream sector may serve as a beggar-thy-neighbor policy, increasing that country's own utility while reducing that of its trading partner countries.     

我国纺织业面临的新贸易壁垒及其对策选择

随着2005年纺织品和服装进口配额制度的取消,纺织品服装贸易的出口竞争日趋激烈,中国纺织业出口面临新贸易壁垒的严峻挑战,本文通过解析贸易壁垒及其影响,结合纺织品的产业分析,提出我国纺织业在新贸易壁垒条件下扩大出口的政策建议。     

The competition effects of the Single Market in Europe

The reduction in trade barriers in Europe through the Single Market Programme (SMP) was intended to increase competition in European markets, and hence welfare and efficiency. The paper examines how the SMP has affected trade patterns and what can be learnt from this regarding the impact on competitive behaviour. Combining an econometric and computable general equilibrium methodology, it is argued that (1) the SMP has indeed had a strong impact on competitive behaviour; (2) the extent of the impact depends both on changes in the intensity of competition as well as on changes in the nature of competitive interaction; (3) while all economies experience potentially large welfare gains from the SMP, it is the smaller economies that experience the larger gains, but this in turn suggests that they experience a greater degree of restructuring.     

Market collusion and the politics of protection

This paper investigates the relationship between trade and competition policy within a model where market collusion and protectionist lobbying are themselves related. Collusion and lobbying are modeled as joint products of the same collective effort of firms. In equilibrium, firms cannot achieve greater cooperation in one dimension without reducing it in the other. A trade agreement that limits the effectiveness of lobbying may cause firms to increase market collusion, thereby increasing the domestic price. Thus, international trade agreements may run counter to the goals of competition policy. On the other side, a more restrictive competition policy is shown to either reduce the domestic price or reduce import protection. Thus, competition policy tends to promote trade policy goals. The reason is that restrictive competition policy undermines collusion at the source—it decreases the per-firm benefit to collusion relative to the gains from deviating—reducing firm cooperation in both dimensions.     

Forward trading in exhaustible-resource oligopoly

We analyze oligopolistic exhaustible-resource depletion when firms can trade forward contracts on deliveries – a market structure relevant for some resource markets (e.g., storable pollution permits, hydro-based power pools) – and find that trading forwards can have substantial implications for resource depletion. We show that when firms’ initial resource-stocks are the same, the subgame-perfect equilibrium path approaches the perfectly competitive path as firms trade forwards frequently. But when the initial stocks differ, firms can credibly escape part of the competitive pressure of forward contracting. It is a unique feature of the resource model that equilibrium contracting and the degree of competition depends on resource endowments.     

HOW THE GLOBALIZATION OF R&D COMPETITION AFFECTS TRADE AND GROWTH

The implications of international R&D competition on trade and growth are investigated. The model is one in which a separate R&D sector competes with the manufacturing sector to secure human capital, and technology is licensed to manufacturers by the winner of a pre-emptive R&D competition. The results show that globalization of R&D competition leads to trade between countries (even identical countries), because the result of competition leads to a reallocation of human capital between sectors. The winning country exports technology and traditional goods, while the loser exports manufactured goods. Globalization with indiscriminate technology licensing increases the world's economic growth rate.     

Monopolistic Competition, Increasing Returns and International Coordination of Entry Policy

This paper presents a new model of monopolistic competition in which firms produce differentiated products under decreasing costs. This model is used to confirm and illustrate the limitations of the excess entry hypothesis, well known in the literature on industrial organization. The validity of the theorem is limited in the sense that it fails to hold in the present model if the properly defined degree of love for variety is sufficiently large. The model is extended to allow for intraindustry trade and to examine the conditions for gains (or losses) from trade in a two-country framework. It is shown how the degree of love for variety affects them. The significance and nature of international coordination of competition policy in the present setting is considered. The degree of love for variety is again shown to be of crucial importance in the characterization of the optimal policy coordination.     

Europe on the Road to Doha: Towards a New Global Trade Round?

This paper reviews progress towards a new trade agreement underthe Doha Development Agenda. A hitherto-unnoticed empiricalregularity suggests that post-Cancun pessimism may be unwarranted.Some of the key contentious issues are examined, including agriculturaland manufacturing trade barriers, competition policy and intellectualproperty rights. A potential sticking point is whether the USwill accept a quasijudicial role for the WTO and constraintson anti-dumping policy. European governments need to decidehow badly they want to complete a new trade agreement, and shouldstart preparing their constituents for compromise if an agreementis to be reached. (JEL F13)     

Differentiated Products,Divided Industries: Firm Preferences over Trade Liberalization

The recent focus on firms in international trade suggests two conjectures about preferences over trade policy – only the most productive firms should support freer trade, and industries can be internally divided over reciprocal liberalization. This paper clarifies the content and scope of these claims. The most productive firms are generally not the greatest beneficiaries from trade liberalization and may oppose further liberalization due to increased competition in export markets from compatriot firms. Exporting industries will feature no support for trade if foreign competition is too strong or barriers too unequal. The key analytic factor generating intra‐industry division is product differentiation, both directly, by increasing export opportunities for less efficient firms, and by inducing home market effects wherein larger countries are more competitive. The implications of these findings for the distributional effects of liberalization and the study of trade politics are discussed.