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New theories of international trade suggest that protectionism can make sense. This finding depends on the introduction of market power and increasing returns to scale into the international trade theory. The enormous political implications of this hypothesis have started a large interest in applied or empirical investigations of this issue. However, econometric work in international trade is comparatively scarce, especially if it comes to testing with individual data. Therefore, this volume is considered to be a contribution to fill that gap. The volume consists of three parts: First, issues in strategic trade are discussed by means of a survey on recent contributions of the literature and by a simulation excercise on optimal trade policy for imperfectly competitive industries.
Second, appart investigating the determinants of trade flows studies the interrelatonships between trade balances and exchange rates, plant size and international trade, and the relevance of firm size and market concentration for the degree of export market integration using business survey firm data. Third, there are studies on imperfect markets, innovations and learning which demonstrate the importance of imperfect competition for international economics. All contributions provide empirical evidence for the revelance of the newly developed trade theories and demonstrate useful quantitative techniques for their investigation.
About the author
Prof. Dr. Klaus F. Zimmermann ist Direktor des Instituts zur Zukunft der Arbeit (IZA) und zugleich Präsident des Deutschen Instituts für Wirtschaftsforschung (DIW Berlin).
