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Intra-Industry Trade And Strategic Trade Police In The Presence of Public Firms

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  • Debashis Pal
  • Mark White

Abstract

The literature on intra-industry trade and strategic trade policy has always considered only profit-maximizing private firms being active in international trade. This paper incorporates state-owned public firms in the context of intra-industry trade. The existence of welfare-maximizing public firms significantly affects intra-industry trade and strategic trade policy. Compared to when both firms are private, the existence of public firms lowers optimal tariffs and subsidies, but also lowers the total volume of trade between the two countries. The lower volume of trade, however, does not translate into lower levels of welfare for the trading countries. [F12, F13, D43, L32]

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal International Economic Journal.

Volume (Year): 17 (2003)
Issue (Month): 4 ()
Pages: 29-41

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Handle: RePEc:taf:intecj:v:17:y:2003:i:4:p:29-41

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References

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  1. James A. Brander & Paul Krugman, 1983. "A 'Reciprocal Dumping' Model of International Trade," NBER Working Papers 1194, National Bureau of Economic Research, Inc.
  2. Lorenz NETT, 1993. "Mixed Oligopoly With Homogeneous Goods," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 64(3), pages 367-393, 07.
  3. Debashis Pal & Mark D. White, 1998. "Mixed Oligopoly, Privatization, and Strategic Trade Policy," Southern Economic Journal, Southern Economic Association, vol. 65(2), pages 264-281, October.
  4. de Fraja, Giovanni & Delbono, Flavio, 1989. "Alternative Strategies of a Public Enterprise in Oligopoly," Oxford Economic Papers, Oxford University Press, vol. 41(2), pages 302-11, April.
  5. James Brander, 1980. "Intra-Industry Trade in Identical Commodities," Working Papers 380, Queen's University, Department of Economics.
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Cited by:
  1. Ngo Long & Frank Staehler, 2008. "How does state ownership affect optimal export taxes?," Economics Bulletin, AccessEcon, vol. 6(37), pages 1-7.
  2. Rupayan Pal, 2012. "How much should you own? Cross-ownership and privatization," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2012-008, Indira Gandhi Institute of Development Research, Mumbai, India.
  3. repec:ebl:ecbull:v:6:y:2008:i:37:p:1-7 is not listed on IDEAS
  4. Ngo Van Long & Frank Staehler, 2007. "Public Ownership and Trade Policy," CIRANO Working Papers 2007s-07, CIRANO.

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