Competing Communications Networks and International Trade

Abstract

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 indefi- nitely, despite network externalities