Download This PaperStrategic Regional Integration
SERIES Working Papers N. 07/2016
15 Pages Posted: 18 Nov 2016
Date Written: November 17, 2016
Abstract
We analyze the impact of globalization on the incentive to strengthen regional integration. In a simple three-country oligopolistic trade model, we demonstrate that increased external competitive pressure may induce governments, influenced by producer interests, to lower intra-regional trade costs in order to mitigate the effects of external competition on local businesses.
Keywords: Regional integration; Globalization; Cournot competition
JEL Classification: F12, F15, F6
Suggested Citation: Suggested Citation
Kjetil Bjorvatn
Norwegian School of Economics and Business Administration ( email )
Helleveien 30
N-5035 Bergen
Norway
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CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany