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Welfare Comparison between Specific and Ad Valorem Export Trade Policy the Case of Multi-Domestic Firms

Author

Listed:
  • K.L. Glen Ueng

    (Department of Public Finance, National Chengchi University, Taiwan)

  • Horn-In Kuo

    (Department of International Business, Ming Chuan University, Taiwan)

Abstract

This paper extends the results obtained by Hwang et al. (1997) and Yang (2005) to the case of multi-domestic firms. Either the domestic government's budget constraint may be binding or there exists the social cost which caused by financing the export subsidy, we find that the policy of the specific export subsidy dominates that of ad valorem export subsidy and ad valorem export tax dominates specific export tax under the case of multi-domestic firms.

Suggested Citation

  • K.L. Glen Ueng & Horn-In Kuo, 2010. "Welfare Comparison between Specific and Ad Valorem Export Trade Policy the Case of Multi-Domestic Firms," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 6(1), pages 17-32, January.
    • Handle: RePEc:jec:journl:v:6:y:2010:i:1:p:17-32
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    More about this item

    Keywords

    cost heterogeneity; specific export subsidy; ad valorem export subsidy; tax distortion;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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