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Implementing results-oriented trade policies: The case of the US-Japanese auto parts dispute

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  • Krishna, Kala
  • Morgan, John

Abstract

Why would the US threaten punitive tariffs on luxury autos to implement a market share target in auto parts? We show that by making threats to a linked market, a market share may be implemented with fairly weak informa- tional and administrative requirements. Moreover, such policies can be both pro-competitive and advatageous to US firms.

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File URL: http://www.sciencedirect.com/science/article/B6V64-3V607BB-3/2/48283b13169c9ca81c20a0253aff90bd
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Bibliographic Info

Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 42 (1998)
Issue (Month): 8 (September)
Pages: 1443-1467

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Handle: RePEc:eee:eecrev:v:42:y:1998:i:8:p:1443-1467

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References

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  1. Levinsohn, J., 1996. "Carwars: Trying to Make Sense of U.S.-Japan Trade Frictions in the Automobile and Automobile Parts Markets," Working Papers 389, Research Seminar in International Economics, University of Michigan.
  2. Krishna, Kala, 1989. "Trade restrictions as facilitating practices," Journal of International Economics, Elsevier, vol. 26(3-4), pages 251-270, May.
  3. Krishna, K & Roy, S & Thursby, M, 1996. "Implementaing Market Access," Papers 96-003, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).
  4. Spencer, Barbara J & Jones, Ronald W, 1991. "Vertical Foreclosure and International Trade Policy," Review of Economic Studies, Wiley Blackwell, vol. 58(1), pages 153-70, January.
  5. Eaton, Jonathan & Grossman, Gene M, 1986. "Optimal Trade and Industrial Policy under Oligopoly," The Quarterly Journal of Economics, MIT Press, vol. 101(2), pages 383-406, May.
  6. Carmichael, Calum M., 1987. "The control of export credit subsidies and its welfare consequences," Journal of International Economics, Elsevier, vol. 23(1-2), pages 1-19, August.
  7. Gruenspecht, Howard K., 1988. "Export subsidies for differentiated products," Journal of International Economics, Elsevier, vol. 24(3-4), pages 331-344, May.
  8. repec:fth:michin:389 is not listed on IDEAS
  9. Greaney, Theresa M., 1996. "Import now! An analysis of market-share voluntary import expansions (VIEs)," Journal of International Economics, Elsevier, vol. 40(1-2), pages 149-163, February.
  10. Greaney, T., 1993. "Import Now! An Analysis of Voluntary Import Expansions (VIEs) to Increase U.S. Market Shares in Japan," Working Papers 343, Research Seminar in International Economics, University of Michigan.
  11. Reitzes, James D. & Grawe, Oliver R., 1994. "Market-share quotas," Journal of International Economics, Elsevier, vol. 36(3-4), pages 431-447, May.
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Citations

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Cited by:
  1. Qiu, Larry D. & Spencer, Barbara J., 2002. "Keiretsu and relationship-specific investment: implications for market-opening trade policy," Journal of International Economics, Elsevier, vol. 58(1), pages 49-79, October.
  2. Yongmin Chen & Jota Ishikawa & Zhihao Yu, 2002. "Trade Liberalization and Strategic Outsourcing," Carleton Economic Papers 02-12, Carleton University, Department of Economics, revised Jul 2004.
  3. Kala Krishna & Suddhasatwa Roy & Marie C. Thursby, 2000. "Can Subsidies for MARs be Procompetitive?," NBER Working Papers 7624, National Bureau of Economic Research, Inc.
  4. Spencer, Barbara J & Qiu, Larry D, 2001. "Keiretsu and Relationship-Specific Investment: A Barrier to Trade?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 871-901, November.
  5. Kala Krishna & Suddhasatwa Roy & Marie Thursby, 1997. "Procompetitive Market Access," NBER Working Papers 6184, National Bureau of Economic Research, Inc.

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