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In our thesis we seek the answer to if trade openness has an effect on income gaps within countries. Since different trade flows can have different effects based on who the trading partners are, we disaggregate the trade flows based on these criteria. Using a dynamic two-ways fixed-effects model (LSDV) based on unbalanced panel data we follow 160 countries (of which 155 contribute to the variance since they have more than one observation) over the time-period 1970-2019 and a gini-coefficient that measures disponible household income. Furthermore, we also include a measurement of absolute poverty, measured as the share of the population living on less than 3,2 USD a day, where we have data for 130 countries (of which 111 with more than one observation, and the earliest observation is 1974). We divide our sample in low-, middle- and high-income countries and control for the effects on the gini-coefficient and absolute poverty stemming from both exports as well as imports. Our results indicate that when low-income countries exports to other low-income countries it decreases the income gaps within the exporting country. Low-income countries trade flows with middle- and high-income countries however seem to have a positive relationship with their income gaps, which we argue provides support for skill-enhancing trade (SET) and skill-biased technological change (SBTC). For high- and middle-income countries we don’t find any support for a relationship between income gaps and trade openness. Regarding absolute poverty we mostly see significant results for high-income countries, where export to other high-income countries decreases poverty while import from other high-income countries increases poverty. / I vår uppsats söker vi svar på om handelsöppenhet har en påverkan på inkomstklyftor inom länder. Då olika handelsflöden kan ha olika påverkan disaggregerar vi även handelsflödena med hänsyn till ursprungsland och handelspartner. Med hjälp av en dynamisk two-ways fixed effects modell (LSDV) baserad på obalanserad paneldata följer vi 160 länder (varav 155 bidrar till variansen då de har mer än en observation) över tidsperioden 1970-2019 och en gini-koefficient som mäter disponibel hushållsinkomst. Utöver detta inkluderar vi även ett mått på absolut fattigdom, mätt som andel av befolkningen som lever på mindre än 3,2 USD om dagen där vi har data för 130 länder (varav 111 med mer än en observation). Vi delar upp vårt sampel i låg-, medel- och höginkomstländer och kontrollerar för både exportens och importens påverkan på gini-koefficienten och absolut fattigdom. Våra resultat indikerar att när låginkomstländer exporterar till andra låginkomstländer minskar inkomstklyftorna i det exporterande landet. Låginkomstländers handelsflöden med medel- och höginkomstländer har däremot ett positivt samband med deras inkomstklyftor, något vi argumenterar för antyder ett stöd för skill-enhancing trade (SET) och skill-biased technological change (SBTC). För medel- och höginkomstländer finner vi inga belägg för ett samband mellan inkomstklyftor och handelsöppenhet. Gällande absolut fattigdom ser vi framförallt signifikanta resultat för höginkomstländer, där export till andra höginkomstländer minskar absolut fattigdom medan import från höginkomstländer ökar absolut fattigdom.

There are two main views of advertising – the informative view and the persuasive view. This thesis studies aspects of the informative view. One aspect of interest is whether firms can benefit from collusion on advertising even though advertising is only informative. If so, will this enhance or lower welfare? There are several reasons why firms may want to collude on adver­tising. First, the legal field is tilted in favour of nonprice collusion. Second, it is not at all obvious that collusion on price is more profitable than collusion on advertising and third, the analyses of Grossman and Shapiro (1984) and others show that profits can be increased by restricting advertising. In Paper 1, we examine firms’ incentives to collude on advertising and the implications for welfare. We find that collusion on advertising and competition on price is more profitable than competition on both price and advertising. We also find that semicollusion on advertising is detrimental to welfare. This suggests a need for monitoring, especially since it is in the interest of firms to restrict price advertising. We also compare semicollusion on price to semicollusion on advertising. We find that, in general, semicollusion on price does not lead to higher profits compared to semicollusion on advertising. Hence we lend theoretical support to the empirical literature that consistently find evidence of semicollusion on advertising rather than on price. Another important issue concerns the effect, on prices and profits, of ad-vertising only a subset of the product range. Many firms, in particular those in the retail sector, sell a wide variety of products but only advertise a few. Recent empirical evidence suggests that prices of unadvertised products are higher (Milyo and Waldfogel, 1999). Theoretically, little is known. In Paper 2, we study the effects of advertising only a subset of products. We allow for both low and high differentiation and, at the same time, we explicitly model the advertising decision. We find that the extend of differentiation between competing firms plays an important role in the analysis of loss leader pricing. When firms sell products with the same reservation price, loss leader pric­ing obtains only when differentiation is low. When products are less similar however, price competition is less intense and, as a result, firms advertise prices above marginal cost. Our loss leader pricing results enable us to shed some light on the seemingly paradoxical empirical findings in the marketing literature that loss leader pricing fails to increase store traffic, loss leader sales and hence to increase profits. We also consider a different subject – price discrimination. Although it is well understood that movements in the exchange rate have a bearing on firm profitability and hence affect firm behaviour, the role of exchange rate variability in the firm’s choice of the number of varieties to produce has (to my knowledge) not been explored. This, despite the fact that the product mix is an important aspect of firm strategy. By tinkering with the number of varieties, a firm can bolster its ability to extract consumer surplus. In Paper 3, we explore this issue. We show that variability in the exchange rate induces the firm to vertically segment markets (i.e., offer two varieties in each market). This happens because exchange rate variability affects income dispersion and hence the firm’s incentives to extract consumer surplus. To better extract surplus, the firm offers two price-quality menus, high quality variant (priced high) for top-end surplus extraction and a low quality variety (priced low) to address market coverage concerns. / <p>Diss. Stockholm : Handelshögskolan, 2005 S. 3-9: sammanfattning, s. 13-95: 3 uppsatser</p>