Strategic Trade Policy with Internationally Owned Firms
AbstractThe consequences of international firm ownership for strategic trade policy are examined both in a general and in a simple linear model of an international duopoly with two governments using production subsidies as policy instruments. At first sight, the case for strategic trade policy seems to be weakened, because international ownership reduces a government's incentive for rent-shifting. Closer inspection shows, however, that there are ownership structures leading to optimal policies which induce the duopolists to behave more collusively. This tends to resolve the conflict between national and international rationality in a policy game with retaliation and makes strategic trade policy look more attractive. Copyright 1995 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Bulletin of Economic Research.
Volume (Year): 47 (1995)
Issue (Month): 3 (July)
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- Steffen Huck & Kai A. Konrad, 2003.
"Strategic Trade Policy and the Home Bias in Firm Ownership Structure,"
CESifo Working Paper Series
892, CESifo Group Munich.
- Huck, Steffen & Konrad, Kai A., 2003. "Strategic trade policy and the home bias in firm ownership structure," Japan and the World Economy, Elsevier, vol. 15(3), pages 299-305, August.
- Huck, Steffen & Konrad, Kai A., 2002. "Strategic trade policy and the home bias in firm ownership structure," Discussion Papers, Research Unit: Market Processes and Governance FS IV 02-25, Social Science Research Center Berlin (WZB).
- Gundlach, Erich & Klodt, Henning & Langhammer, Rolf J. & Soltwedel, Rüdiger, 1995. "Fairneß im Standortwettbewerb? Auf dem Weg zur internationalen Ordnungspolitik," Kiel Discussion Papers 254, Kiel Institute for the World Economy (IfW).
- Morasch, Karl, 2000. "Strategic alliances: a substitute for strategic trade policy?," Journal of International Economics, Elsevier, vol. 52(1), pages 37-67, October.
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