Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
The paper develops new testable implications for monopolistic competition in the open economy. Within a two-sector model we explore how international trade affects plant size, the degree of product diversity, and excess capacity. The analysis then focuses on how trade affects the degree of domestic and international concentration, intersectoral capital mobility, and output in the competitive sector. Finally, we compare the model to the traditional Hecksher-Ohlin model and find that many of the central propositions still hold.