Social Science

Kawaguchi (2003) developed spatial equilibrium model by changing the traditional marketing route "producers-consumers" to more concrete marketing route "producers as price takers-profit making traders-consumers" . And Kubo, Kano and Maeda (2008b) revised the spatial equilibrium model by considering oligopolistic processing firms which make some processed goods from a raw material. The oligopolistic processing firms are characterized as the firm which can hold a great control over their products' prices against the producers in raw material market and the consumers in processed goods market. But it is insufficient to apply the model to quantitative analysis of International trade. The purpose of this paper is to apply the model of Kubo, Kano and Maeda (2008b) to the model of International trade based on Shono and Kawaguchi (1999a, 1999b), Maeda (2001) which are the model of perfectly competitive international trade and of oligopolistic international trade. Also, analyses simulations with the use of the model are performed under the four scenarios, 1) a perfectly competitive in both raw material market and processed goods market, 2) supply-oligopolistic in processed goods market, 3) demand-oligopolistic in raw material market, 4) both supply-oligopolistic in processed goods market and demand-oligopolistic in raw material market. As a result, the following facts are yielded: oligopolistic processing firms beat the price down in raw material market and push up the price in processed goods, which are more profitable than price-takers, which are the same results as Kubo, Kano and Maeda (2008b) .