On the Market Structure in One‐Way Intraindustry Trade

ABSTRACT This paper explores a one‐way intraindustry trade model with government intervention, highlighting the role of antitrust regulations in promoting domestic industry competition to enhance the exporting country's social welfare. Under a monopoly in the exporting country, social welfare of the exporting country is lower than that of the importing country. However, as domestic competition intensifies, the exporting country's social welfare exceeds that of the importing country. Notably, increased competition in the local market of the exporting country consistently improves its social welfare, irrespective of the degree of product differentiation.