Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/38678
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dc.contributor.authorSalvo, Albertoen_US
dc.date.accessioned2010-08-13T08:26:36Z-
dc.date.available2010-08-13T08:26:36Z-
dc.date.issued2006en_US
dc.identifier.urihttp://hdl.handle.net/10419/38678-
dc.description.abstractI begin by fitting traditional gravity equations to document that regional flows in the Brazilian cement industry exhibit gravity-like structure, with cement trade decaying sharply in distance traveled. I then show that this large distance effect owes to firms' strategic behavior over and above trade costs, with firm-level spatial supply decisions being characterized by the tacitly-collusive division (or sharing) of geographic markets. I am able to control for plant and trade costs thanks to an unusually disaggregated dataset, the simple production technology and a unique institutional setting. Thus, oligopoly can magnify the effects of distance. The paper suggests that trade theory, in its mission to explain the pattern of trade flows, should continue to advance in its modeling of strategic behavior in oligopoly. The paper also provides a rich and original example of a spatial cartel's pattern of supply. The tacit supply arrangement allows the cartel to sustain high prices, avoid large trade costs and, through the use of geography, potentially improve coordination.en_US
dc.language.isoengen_US
dc.publisher|aCenter for the Study of Industrial Organization at Northwestern Univ. |cEvanston, Ill.en_US
dc.relation.ispartofseries|aCSIO working paper |x0083en_US
dc.subject.ddc330en_US
dc.subject.stwZementindustrieen_US
dc.subject.stwRäumlicher Wettbewerben_US
dc.subject.stwOligopolen_US
dc.subject.stwTransaktionskostenen_US
dc.subject.stwGravitationsmodellen_US
dc.subject.stwWettbewerbsbeschränkungen_US
dc.subject.stwBrasilienen_US
dc.titleTrade flows in a spatial oligopoly: Gravity works well, but what does it explain?en_US
dc.type|aWorking Paperen_US
dc.identifier.ppn574936858en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-

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