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Journal of Economic Integration 2006 September;21(3) :447-457.
DOI: https://doi.org/10.11130/jei.2006.21.3.447
On Effects of Market Integration on Technology Choice

Ryoichi Nomura 

Ritsumeikan University
Copyright ©2006 Journal of Economic Integration
ABSTRACT

In this paper, we investigate how market integration affects firms’ technology choices. Although market integration encourages cost-reducing research and development (R&D) investments in many cases, it may discourage it in two cases: (1) when market sizes are quite different and the effects of R&D are not so high, market integration may discourage R&D in a large country; and (2) if the firm in a large country only invests in the segmented market, market integration may discourage R&D in a large country, while encouraging it in a small country. These results correspond to data about R&D intensities in European Union countries.

JEL Classifications: F02, F15, L13, O31

Keywords: Market Integration | Technology Choice | Cournot Competition
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