On the impact of competition on trade and firm location

in Journal of Regional Science (2014)

We study how the level of trade costs and the intensity of competition interact to explain the nature and intensity of trade within a given industry and the location of firms across countries. As trade ... [more ▼]

We study how the level of trade costs and the intensity of competition interact to explain the nature and intensity of trade within a given industry and the location of firms across countries. As trade costs decrease from very high to very low values, the global economy moves from autarky to two-way trade, through one-way trade from the larger to the smaller region. By exploring the intensive and extensive margins of exports, we investigate how the intensity of trade reacts to the degree of competitiveness. Furthermore, when firms are free to change location, they flow from the small to the large country, and the larger country is always a net exported on the manufactured good. Firms located in the big country have a bigger size than those located in the small one. Under one-way trade, the relocation of firms changes their attitude toward export. [less ▲]

The spatial selection of heterogeneous firms

in Journal of International Economics (2010), 82(2), 230-237

Empirical research on strategic alliances has focused on the idea that alliance partners are selected on the basis of social capital considerations. In this paper we emphasize instead the role of ... [more ▼]

Empirical research on strategic alliances has focused on the idea that alliance partners are selected on the basis of social capital considerations. In this paper we emphasize instead the role of complementary knowledge stocks (broadly defined) in partner selection, arguing not only that knowledge complementarity should not be overlooked, but that it may be the true causal force behind alliance formation. To marshal evidence on this point, we design a simple model of partner selection in which firms ally for the purpose of learning and innovating, and in doing so create an industry network. We abstract completely from network-based structural and strategic motives for partner selection and focus instead on the idea that firms’ knowledge bases must “fit” in order for joint leaning and innovation to be possible, and thus for an alliance to be feasible. The striking result is that while containing no social capital considerations, this simple model replicates the firm conduct, network structure, and contingent effects of network position on performance observed and discussed in the empirical literature. [less ▲]

Competition in Multi-characteristics Spaces: Hotelling Was Almost Right

in Journal of Economic Theory (1998), 78(1), 76-102

Lancasterian models of product differentiation typically assume a one-dimension characteristics space. We show that standard results on prices and locations no longer hold when firms compete in a multi ... [more ▼]

Lancasterian models of product differentiation typically assume a one-dimension characteristics space. We show that standard results on prices and locations no longer hold when firms compete in a multi- characteistics space. [less ▲]