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Abstract

The possibility of noncompetitive behavior resulting from multimarket contact (i.e., mutual forbearance) has always been a source of concern among industrial organization economists and policy makers. The increasing global presence of multinational corporations has added a new dimension to the analysis of multimarket competition. Their growing influence on the world economy poses new questions about the effects of multinational competition on domestic welfare and the international competitiveness of domestic industries. Recent developments in the interface between industrial organization and international trade theories provide new research opportunities and may shed some light on the economic consequences of multinational competition and its policy implications. This paper outlines some of the major issues in the study of multinational competition and surveys recent theoretical and empirical studies of multinational and multimarket competition. It attempts to develop a conceptual framework whereby the nature of multinational competition in the food manufacturing sector can be analyzed. It is intended as a road map for on-going research.

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