Additional information is available for the following registered author(s):

• Margherita Scoppola

The paper develops a two-stage duopoly model in which market structure is endogenous, as it is the outcome of the first stage of the game. The model considers a private firm and a State Trading Enterprise (STE) competing on a foreign market; the most important difference between the private firm and the STE is that while the STE makes use of external agents to export, the private firm may choose to vertically integrate downstream when transaction costs are large enough with respect to fixed costs. The game is solved for different modes of competition and under different assumptions regarding
both homogenous and differentiated products. The results show that external shocks on export markets affecting the relative values of transaction and fixed costs may result in a change in market structures. The degree of product differentiation and the assumed mode of competition significantly affect the
relative values of transaction and fixed costs at which the market sructure changes.

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Paper provided by Macerata University, Department of Studies on Economic Development (DiSSE) in its series Working Papers with number 04-2007.

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Date of creation: Mar 2007
Date of revision: Feb 2009
Publication status: Published in Agricultural Economics 37 (2007) 277-291
Handle: RePEc:mcr:wpaper:wpaper00004

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Related research

Keywords: Multinational firm; international grain trade; State Trading Enterprises;

Find related papers by JEL classification:
O1 - Economic Development, Technological Change, and Growth - - Economic Development
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

This paper has been announced in the following NEP Reports:

• NEP-ALL-2008-11-11 (All new papers)

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This page was last updated on 2009-12-2.