Antitrust in Open Economies

Tinbergen Institute Discussion Paper No. 2006-006/2

IIIS Discussion Paper No. 120

32 Pages Posted: 20 Jan 2006

See all articles by Joseph F. Francois

Joseph F. Francois

University of Bern - Department of Economics; Centre for Economic Policy Research (CEPR); Vienna Institute of International Economic Studies (WIIW); University of Adelaide - School of Economics

Henrik Horn

Research Institute of Industrial Economics (IFN); Centre for Economic Policy Research (CEPR); Bruegel

Multiple version iconThere are 2 versions of this paper

Date Written: January 2006

Abstract

We examine antitrust rules in a two county general equilibrium trade model, contrasting national and multilateral (cooperative) determination of competition policy, exploring the properties of the policy equilibrium. It is not imperfect competition, but variation in competitive stance between sectors that matters for trading partners. Beggar-thy-neighbor competition policies relate to countries' comparative advantages, and hurt the factor intensively used, or specific to, the imperfectly competitive sector. They also create a competitive advantage for export firms. FDI can be pro-competitive in this context, reducing the scope for beggar-thy-neighbor policies and reducing the gains from a multilateral competition agreement.

Keywords: antitrust, competition policy, merger policy, trade and imperfect competition, FDI

JEL Classification: L4, F12, F3

Suggested Citation

Francois, Joseph F and Horn, Henrik, Antitrust in Open Economies (January 2006). ; IIIS Discussion Paper No. 120. Available at SSRN: https://ssrn.com/abstract=875831 or http://dx.doi.org/10.2139/ssrn.875831

Joseph F Francois (Contact Author)

University of Bern - Department of Economics ( email )

Schanzeneckstrasse 1
Bern, CH-3001
Switzerland

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Vienna Institute of International Economic Studies (WIIW) ( email )

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A-1010 Vienna
Austria

University of Adelaide - School of Economics ( email )

Adelaide SA, 5005
Australia
+61 8 8303 5540 (Phone)
+61 8 8223 1460 (Fax)

Henrik Horn

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Stockholm, SE-102 15
Sweden

HOME PAGE: http://www.econ-law.se

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

HOME PAGE: http://www.econ-law.se

Bruegel ( email )

Rue de la Charité 33
B-1210 Brussels Belgium
Belgium

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