Cost heterogeneity, industry concentration and strategic trade policies
AbstractThis paper shows that if domestic firms do not have identical unit costs, then the interplay between the Herfindahl index of concentration and the elasticity of the slope of the demand curve is of major importance in the determination of optimal trade policies. When the demand curve is concave, an export tax will shift the domestic industry's concentration in favor of lower cost firms, resulting in an improvement in allocative production efficiency.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of International Economics.
Volume (Year): 43 (1997)
Issue (Month): 1-2 (August)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505552
Other versions of this item:
- Van Long, N. & Soubeyran, A., 1996. "Cost Heterogeneity, Industry Concentration and Startegic Trade Policies," G.R.E.Q.A.M. 96a39, Universite Aix-Marseille III.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
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