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Domestic Input Policies in Free Trade Areas with National Asymmetries

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  • Yann Duval

    ()
    (Asian Institute of Technology, School of Management)

Abstract

This paper combines some of the most realistic components of the competitive and strategic trade literature to examine both socially and individually optimal domestic input policies in free trade areas (FTAs). When asymmetries in the number of firms, in the number of consumers, or in production costs exist across countries, tax harmonization is not optimal and input taxes depend on the shape of the production process and the degree of imperfect competition. The presence of input tax asymmetries in a customs union or FTA does not constitute evidence of strategic behavior at the national level.

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File URL: http://college.holycross.edu/RePEc/eej/Archive/Volume28/V28N2P241_253.pdf
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Bibliographic Info

Article provided by Eastern Economic Association in its journal Eastern Economic Journal.

Volume (Year): 28 (2002)
Issue (Month): 2 (Spring)
Pages: 241-253

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Handle: RePEc:eej:eeconj:v:28:y:2002:i:2:p:241-253

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Related research

Keywords: Free Trade; Strategic Trade; Trade;

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References

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  1. Lahiri, Sajal & Raimondos-Moller, Pascalis, 1998. "Public good provision and the welfare effects of indirect tax harmonisation," Journal of Public Economics, Elsevier, vol. 67(2), pages 253-267, February.
  2. Dixit, Avinash, 1984. "International Trade Policy for Oligopolistic Industries," Economic Journal, Royal Economic Society, vol. 94(376a), pages 1-16, Supplemen.
  3. Bresnahan, Timothy F, 1981. "Duopoly Models with Consistent Conjectures," American Economic Review, American Economic Association, vol. 71(5), pages 934-45, December.
  4. Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
  5. Gerber, James, 2000. "National Policies and the Limits of International Integration," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 1(01).
  6. Novshek, William, 1985. "On the Existence of Cournot Equilibrium," Review of Economic Studies, Wiley Blackwell, vol. 52(1), pages 85-98, January.
  7. Keen, Michael & Lahiri, Sajal, 1993. "Domestic tax reform and international oligopoly," Journal of Public Economics, Elsevier, vol. 51(1), pages 55-74, May.
  8. Conrad Klaus, 1993. "Taxes and Subsidies for Pollution-Intensive Industries as Trade Policy," Journal of Environmental Economics and Management, Elsevier, vol. 25(2), pages 121-135, September.
  9. Jonathan Eaton & Gene M. Grossman, 1986. "Optimal Trade and Industrial Policy Under Oligopoly," NBER Working Papers 1236, National Bureau of Economic Research, Inc.
  10. Martin Richardson, 1994. "Customs Unions and Domestic Taxes," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 537-50, August.
  11. Yann Duval & Stephen Hamilton, 2002. "Strategic Environmental Policy and International Trade in Asymmetric Oligopoly Markets," International Tax and Public Finance, Springer, vol. 9(3), pages 259-271, May.
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