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Journal of Economic Integration 2008 March;23(1) :91-103.
Competing Communications Networks and International Trade

Marcelo Fukushima Toru Kikuchi 

Kobe University
Copyright ©2008 Journal of Economic Integration

This paper investigates the effects of competing communication networks on trade patterns in a Chamberlinian-Ricardian model of monopolistically competitive firms with a continuum of industries that require communication services in production. We conclude that intraindustry trade between different networks is determined by the relative size of networks and technological differences, and that a network will not have an incentive to expand indefinitely, despite network externalities.

JEL classification: D43, F12

Keywords: Competing communications networks | International trade
1. Dixit, A. K., and Stiglitz, J. E. (1977) Monopolistic Competition and Optimum Product Diversity, American Economic Review, 67, 297-308.
2. Dornbusch, R., Fischer, S., and Samuelson, P. (1977) Comparative Advantage, Trade and Payments in a Ricardian Model with a Continuum of Goods, American Economic Review, 67, 823-29.
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