International Cross-Ownership and Strategic Trade Policies
AbstractThe paper analyzes a model of strategic trade policies in the presence of international cross-ownership of firms that are heterogenous both in terms of costs and in terms of extent of foreign ownership. The equilibrium pattern of taxes and subsidies is characterized for any arbitrary cross-ownership profile, and any number of heterogenous firms. The equilibrium subsidy (or tax) given to any firm is shown to depend, in a separable manner, on the firm's characteristics and on the covariance of the distribution of cost and foreign ownership across firms. A neutrality theorem is proved concerning the Nash equilibrium of the game between governments: in equilibrium, the pattern of trade, the value of each firm, and world welfare are independent of the ownership pattern. Copyright 2001 by Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of International Economics.
Volume (Year): 9 (2001)
Issue (Month): 1 (February)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576
Other versions of this item:
- Long, N.V. & Soubeyran, A., 1998. "International Cross Ownership And Strategic Trade Policies," G.R.E.Q.A.M. 98a21, Universite Aix-Marseille III.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
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- Ishikawa, Jota & Sugita, Yoichi & Zhao, Laixun, 2008.
"Commercial Policy and Foreign Ownership,"
CCES Discussion Paper Series
2, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
- Ngo Van Long & Antoine Soubeyran, 2003. "A Theory of Favoritism under International Oligopoly," CIRANO Working Papers 2003s-15, CIRANO.
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