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Minimum Quality Standard and Protectionism

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  • Bonroy, Olivier

Abstract

We studied the protectionist character of a minimum quality standard (MQS). We show that in the fixed cost model where two firms, one local and one foreign, compete in a local market, the implementation of a MQS on the local market is a protectionist political only if the local firm supplies the lower quality, whatever the type of competition (Cournot or Bertrand) and the technology differential between the firms.

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Bibliographic Info

Paper provided by GREEN in its series Cahiers de recherche with number 0302.

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Date of creation: 2003
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Handle: RePEc:lvl:lagrcr:0302

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Keywords: Minimum Quality Standard; Protectionism; Endogenous Quality;

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  1. Ecchia, Giulio & Lambertini, Luca, 1997. "Minimum Quality Standards and Collusion," Journal of Industrial Economics, Wiley Blackwell, vol. 45(1), pages 101-13, March.
  2. Boom, Anette, 1995. "Asymmetric International Minimum Quality Standards and Vertical Differentiation," Journal of Industrial Economics, Wiley Blackwell, vol. 43(1), pages 101-19, March.
  3. Motta, Massimo, 1993. "Endogenous Quality Choice: Price vs. Quantity Competition," Journal of Industrial Economics, Wiley Blackwell, vol. 41(2), pages 113-31, June.
  4. L. Lambertini & C. Scarpa, 1999. "Minimum Quality Standards and Predatory Behaviour," Working Papers 353, Dipartimento Scienze Economiche, Universita' di Bologna.
  5. David J. Salant, 1986. "Equilibrium in a Spatial Model of Imperfect Competition with Sequential Choice of Locations and Quantities," Canadian Journal of Economics, Canadian Economics Association, vol. 19(4), pages 685-715, November.
  6. Crampes, C. & Hollander, A., 1991. "Duopoly and Quality Standards," Cahiers de recherche 9128, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  7. Mattoo, Aaditya, 2001. "Discriminatory Consequences of Non-discriminatory Standards," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 16, pages 78-105.
  8. Dongsheng Zhou & Barbara J. Spencer & Ilan Vertinsky, 2000. "Strategic Trade Policy with Endogenous Choice of Quality and Asymmetric Costs," NBER Working Papers 7536, National Bureau of Economic Research, Inc.
  9. Tanaka, Yasuhito, 2001. "Profitability of price and quantity strategies in an oligopoly," Journal of Mathematical Economics, Elsevier, vol. 35(3), pages 409-418, June.
  10. Fischer, Ronald & Serra, Pablo, 2000. "Standards and protection," Journal of International Economics, Elsevier, vol. 52(2), pages 377-400, December.
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Cited by:
  1. Mario Pezzino, 2010. "Minimum Quality Standards with More Than Two Firms Under Cournot Competition," The IUP Journal of Managerial Economics, IUP Publications, vol. 0(3), pages 26-45, August.

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