Professor Alberto Salvo's research examines the effects of globalization in local markets. A common theme that runs through his work is the notion that a foreign sector can affect the behavior of local agents (e.g., firms, workers) even when the foreign sector does not actually "penetrate" the local market. For example, a domestic oligopoly may respond to (the threat of) import competition with imports barely occurring, that is, import competition can matter even in local markets which imports hardly penetrate. Equivalently, the "specter of offshoring" or the threat of international competitors gaining ground may push organized workers to accept lower real wages or to work harder, without the substantial movement of jobs or advance of global competitors.

Another example is that of an international cartel which, to save on transport costs and boost cartel profits, allocates geographic markets to cartel members with nearby facilities, thus reducing quantities traded across markets. An observer who concludes from these low (or zero) trade flows that markets are not integrated would be making a mistake, given the multimarket nature of the cartel agreement.

The bigger picture is that the cross-border movement of goods, capital and tasks alone might understate the extent of world integration.

Professor Salvo is also studying the rising middle class in countries that are fast-integrating into the world economy. In particular, the arrival of price-sensitive consumers to the market can have a profound impact on the competitive landscape, including entry by players focused on this segment and prices changes by incumbents.

Professor Salvo consults for government on Antitrust Policy and has worked in the consumer goods industry.

Antitrust Issues
Globalization
Industrial Economics
International Business
International Economics
International Trade
Strategy