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Regulatory Protection When Firms Move First

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Abstract

I investigate the imposition of a horizontal technical barrier to trade (HTBT) in a symmetric, cross-hauling duopoly. Tariffs and subsidies are ruled out, but, in the absence of a mutual recognition agreement, it is possible for governments to impose HTBTs, so long as firms apply different technologies. If firms are first movers, this possibility may induce them to avoid technical collaboration, in order to tempt governments into creating local monopolies, except where spillovers and R&D effects are high. This exacerbates the costs of regulatory protection, compared to standard models without R&D or spillovers.

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File URL: http://www.lboro.ac.uk/departments/sbe/RePEc/lbo/lbowps/Regprot.pdf
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Bibliographic Info

Paper provided by Department of Economics, Loughborough University in its series Discussion Paper Series with number 2009_19.

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Date of creation: Nov 2009
Date of revision: Nov 2009
Handle: RePEc:lbo:lbowps:2009_19

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Postal: Loughborough, Leicestershire, LE11 3TU
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Web page: http://www.lboro.ac.uk/departments/sbe/research/economics/index.html
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Keywords: Research and development; spillovers; trade; protection.;

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  1. Costinot, Arnaud, 2008. "A Comparative Institutional Analysis of Agreements on Product Standards," University of California at San Diego, Economics Working Paper Series qt09f6660d, Department of Economics, UC San Diego.
  2. Irwin, Douglas & Pavcnik, Nina, 2003. "Airbus versus Boeing Revisited: International Competition in the Aircraft Market," CEPR Discussion Papers 3876, C.E.P.R. Discussion Papers.
  3. T.Huw Edwards, 2007. "International Share Ownership, Profit Shifting and Protectionism," Discussion Paper Series 2007_28, Department of Economics, Loughborough University, revised Nov 2007.
  4. Edwards Terence Huw, 2009. "Tariffs, Horizontal Regulatory Standards and Protection against Foreign Competitors," Global Economy Journal, De Gruyter, vol. 9(2), pages 1-27, June.
  5. James A. Brander & Barbara J. Spencer, 1984. "Export Subsidies and International Market Share Rivalry," NBER Working Papers 1464, National Bureau of Economic Research, Inc.
  6. Crampes, Claude & Hollander, Abraham, 1995. "Duopoly and quality standards," European Economic Review, Elsevier, vol. 39(1), pages 71-82, January.
  7. Daniel Sturm, 2006. "Product standards, trade disputes, and protectionism," Canadian Journal of Economics, Canadian Economics Association, vol. 39(2), pages 564-581, May.
  8. H. Lutz, Stefan, 2000. "Trade Effects of Minimum Quality Standards with and without Deterred Entry," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 15, pages 314-344.
  9. 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.
  10. 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.
  11. Lutz, Stefan, 1996. "Vertical Product Differentiation, Quality Standards, and International Trade Policy," CEPR Discussion Papers 1443, C.E.P.R. Discussion Papers.
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