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

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  • K.L. Glen Ueng

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

  • Horn-In Kuo

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

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    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.

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    File URL: http://www.jem.org.tw/content/pdf/Vol.6No.1/02.pdf
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    Bibliographic Info

    Article provided by College of Business, Feng Chia University, Taiwan in its journal Journal of Economics and Management.

    Volume (Year): 6 (2010)
    Issue (Month): 1 (January)
    Pages: 17-32

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    Handle: RePEc:jec:journl:v:6:y:2010:i:1:p:17-32

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    Related research

    Keywords: cost heterogeneity; specific export subsidy; ad valorem export subsidy; tax distortion;

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