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Horizontal Regulatory Protection. Its appeal and implictions in a linear Cournot duopoly

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Author Info
T.Huw Edwards () (Dept of Economics, Loughborough University)

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Abstract

I set up a linear model of a cross-hauling, Cournot duopoly. Even where countries are small, there exists a motive for protection to achieve a profit-shift and to raise revenue. Where the protection is of tariff form, then the protection will only totally exclude the foreign firm for a limited set of parameter values. By contrast, where the protection takes the form of a horizontal technical barrier to trade (HTBT), the government will always exclude the foreign firm. Where there is no constraint on imposing tariffs, these will always be preferred to the HTBT. However, if tariff reductions are imposed by international agreement without simultaneous restrictions on HTBTs, then reductions below a threshold level will trigger imposition of an HTBT sufficient to totally exclude the foreign firm.

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File URL: http://www.lboro.ac.uk/departments/ec/RePEc/lbo/lbowps/wp2007-05.pdf
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Paper provided by Department of Economics, Loughborough University in its series Discussion Paper Series with number 2007_05.

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Date of creation: Feb 2007
Date of revision: Feb 2007
Handle: RePEc:lbo:lbowps:2007_05

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Related research
Keywords: : Duopoly; trade; protection.;

Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F15 - International Economics - - Trade - - - Economic Integration
C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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.:

  1. Lutz, Stefan, 1996. "Vertical Product Differentiation, Quality Standards, and International Trade Policy," CEPR Discussion Papers 1443, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  2. Das, Satya P. & Donnenfeld, Shabtai, 1989. "Oligopolistic competition and international trade : Quantity and quality restrictions," Journal of International Economics, Elsevier, vol. 27(3-4), pages 299-318, November. [Downloadable!] (restricted)
  3. T. Huw Edwards, 2004. "Trade and Strategic Regulatory Bias in Monopolistic Industries," Discussion Paper Series 2004-21, Department of Economics, Loughborough University, revised Sep 2004. [Downloadable!]
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Cited by:
(explanations, 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.)

  1. T.Huw Edwards, 2007. "International Share Ownership, Profit Shifting and Protectionism," Discussion Paper Series 2007_28, Department of Economics, Loughborough University, revised Nov 2007. [Downloadable!]
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