Advanced Search
MyIDEAS: Login to save this paper or follow this series

Industry Concentration and Strategic Trade Policy in Successive Oligopoly

Contents:

Author Info

  • Gjermund Nese
  • Odd Rune Straume

Abstract

We study a policy game between exporting and importing countries in vertically linked industries. In a successive international Cournot oligopoly, we analyse incentives for using tax instruments strategically to shift rents vertically, between exporting and importing countries, and horizontally, between exporting countries. We show that the equilibrium outcome depends crucially on the relative degree of competitiveness in the upstream and downstream parts of the industry. With respect to national welfare, a more competitive upstream industry may benefit an exporting (upstream) country and harm an importing (downstream) country. On the other hand, a more competitive downstream industry may harm exporting countries.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2005/wp-cesifo-2005-04/cesifo1_wp1439.pdf
Download Restriction: no

Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1439.

as in new window
Length:
Date of creation: 2005
Date of revision:
Handle: RePEc:ces:ceswps:_1439

Contact details of provider:
Postal: Poschingerstrasse 5, 81679 Munich
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Email:
Web page: http://www.cesifo.de
More information through EDIRC

Related research

Keywords: successive oligopoly; strategic trade policy; industry concentration;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Ishikawa, Jota & Lee, Ki-Dong, 1997. "Backfiring tariffs in vertically related markets," Journal of International Economics, Elsevier, vol. 42(3-4), pages 395-423, May.
  2. Bernhofen, Daniel M, 1997. "Strategic Trade Policy in a Vertically Related Industry," Review of International Economics, Wiley Blackwell, vol. 5(3), pages 429-33, August.
  3. Greenhut, M L & Ohta, H, 1979. "Vertical Integration of Successive Oligopolists," American Economic Review, American Economic Association, vol. 69(1), pages 137-41, March.
  4. Ishikawa, Jota & Spencer, Barbara J., 1999. "Rent-shifting export subsidies with an imported intermediate product," Journal of International Economics, Elsevier, vol. 48(2), pages 199-232, August.
  5. Austvik, Ole Gunnar, 1997. "Gas pricing in a liberalized European market; will the rent be taxed away?," Energy Policy, Elsevier, vol. 25(12), pages 997-1012, October.
  6. Radetzki, Marian, 1999. "European natural gas: market forces will bring about competition in any case," Energy Policy, Elsevier, vol. 27(1), pages 17-24, January.
  7. Katrak, Homi, 1977. "Multi-national Monopolies and Commercial Policy," Oxford Economic Papers, Oxford University Press, vol. 29(2), pages 283-91, July.
  8. Golombec, R. & Gjelsvik, E. & Knut, E. & Rosendahl, E., 1996. "Increased Competition on the Supply Side on the Western European Natural Gas Merket," Memorandum 11/1996, Oslo University, Department of Economics.
  9. Sajal Lahiri & Yoshiyasu Ono, 1999. "Optimal Tariffs in the Presence of Middlemen," Canadian Journal of Economics, Canadian Economics Association, vol. 32(1), pages 55-70, February.
  10. Hillman, Arye L & Templeman, Joseph, 1985. "On the Use of Trade Policy Measures by a Small Country to Counter Foreign Monopoly Power," Oxford Economic Papers, Oxford University Press, vol. 37(2), pages 346-52, June.
  11. Huck, Steffen & Konrad, Kai A., 2001. "Merger profitability and trade policy," Discussion Papers, Research Unit: Market Processes and Governance FS IV 01-12, Social Science Research Center Berlin (WZB).
  12. Horn, Henrik & Levinsohn, James, 2001. "Merger Policies and Trade Liberalisation," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 111(470), pages 244-76, April.
  13. Jonathan Eaton & Gene M. Grossman, 1983. "Optimal Trade and Industrial Policy Under Oligopoly," NBER Working Papers 1236, National Bureau of Economic Research, Inc.
  14. 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.
  15. Brander, James A. & Spencer, Barbara J., 1984. "Trade warfare: Tariffs and cartels," Journal of International Economics, Elsevier, vol. 16(3-4), pages 227-242, May.
  16. Percebois, Jacques, 1999. "The gas deregulation process in Europe: economic and political approach," Energy Policy, Elsevier, vol. 27(1), pages 9-15, January.
  17. Barbara J. Spencer & Ronald W. Jones, 1989. "Trade and Protection in Vertically Related Markets," NBER Working Papers 3023, National Bureau of Economic Research, Inc.
  18. Pascalis Raimondos-Møller & Alan D. Woodland, 2000. "Tariff strategies and small open economies," Canadian Journal of Economics, Canadian Economics Association, vol. 33(1), pages 25-40, February.
  19. Jones, R.W. & Spencer, B.J., 1989. "Vertical Foreclosure And International Trade Policy," RCER Working Papers 194, University of Rochester - Center for Economic Research (RCER).
  20. 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.
  21. James Brander & Slobodan Djajic, 1983. "Rent-Extracting Tariffs and the Management of Exhaustible Resources," Canadian Journal of Economics, Canadian Economics Association, vol. 16(2), pages 288-98, May.
  22. Kamal Saggi & Halis Murat Yildiz, 2006. "On the International Linkages between Trade and Merger Policies," Review of International Economics, Wiley Blackwell, vol. 14(2), pages 212-225, 05.
  23. Maroeska G. Boots, Fieke A.M. Rijkers and Benjamin F. Hobbs, 2004. "Trading in the Downstream European Gas Market: A Successive Oligopoly Approach," The Energy Journal, International Association for Energy Economics, International Association for Energy Economics, vol. 0(Number 3), pages 73-102.
  24. Winston W. Chang & Hajime Sugeta, 2004. "Conjectural Variations, Market Power, and Optimal Trade Policy in a Vertically Related Industry," Review of International Economics, Wiley Blackwell, vol. 12(1), pages 12-26, 02.
  25. James A. Brander & Barbara J. Spencer, 1980. "Tariffs and the Extraction of Foreign Monopoly Rents under Potential Entry," Working Papers, Queen's University, Department of Economics 414, Queen's University, Department of Economics.
  26. Mark Rysman, 2000. "Competition Policy as Strategic Trade," Papers, Boston University - Industry Studies Programme 0100, Boston University - Industry Studies Programme.
  27. Steffen Ziss, 2005. "Horizontal mergers and successive oligopoly," Working Papers, Wilfrid Laurier University, Department of Economics eg0041, Wilfrid Laurier University, Department of Economics, revised 2005.
  28. Simon Cowan, 1989. "Trade and Competition Policies for Oligopolies," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 125(3), pages 464-483, September.
  29. Kennedy Peter W., 1994. "Equilibrium Pollution Taxes in Open Economies with Imperfect Competition," Journal of Environmental Economics and Management, Elsevier, vol. 27(1), pages 49-63, July.
  30. Bergstrom, Theodore C, 1982. "On Capturing Oil Rents with a National Excise Tax," American Economic Review, American Economic Association, vol. 72(1), pages 194-201, March.
  31. Ziss, Steffen, 1997. "Strategic Trade Policy and Vertical Structure," Review of International Economics, Wiley Blackwell, vol. 5(1), pages 142-52, February.
  32. Richardson, Martin, 1999. "Trade and Competition Policies: Concordia Discors?," Oxford Economic Papers, Oxford University Press, vol. 51(4), pages 649-64, October.
  33. Salinger, Michael A, 1988. "Vertical Mergers and Market Foreclosure," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 103(2), pages 345-56, May.
  34. Dixit, Avinash, 1984. "International Trade Policy for Oligopolistic Industries," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 94(376a), pages 1-16, Supplemen.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Lommerud, Kjell Erik & Olsen, Trond E. & Straume, Odd Rune, 2005. "Access regulation and cross-border mergers: Is international coordination beneficial?," Working Papers in Economics 13/05, University of Bergen, Department of Economics.
  2. Reza Oladi & John Gilbert, 2009. "Buyer and Seller Concentration in Global Commodity Markets," Working Papers 200911, Utah State University, Department of Economics, revised 15 Sep 2009.
  3. Lommerud, Kjell Erik & Olsen, Trond E. & Straume, Odd Rune, 2006. "Cross border mergers and strategic trade policy with two-part taxation: is international policy coordination beneficial?," Discussion Papers, Research Unit: Market Processes and Governance SP II 2006-24, Social Science Research Center Berlin (WZB).
  4. Michal Mravec, 2007. "Understanding the Lack of Competition in Natural Gas Markets: The Impact of Storage Ownership and Upstream Competition," CERGE-EI Working Papers wp342, The Center for Economic Research and Graduate Education - Economic Institute, Prague.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_1439. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.