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Tariff Policy and Transport Costs under Reciprocal Dumping

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  • Jun Oshiro

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    (Graduate School of Economics, Osaka University)

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    Abstract

    This paper analyzes tariff competition by investigating the strategic interactions among firms that are highly mobile across national boundaries. Although high transport costs yield a geographic dispersion of the industry, sufficiently low transport costs result in a core-periphery location where nobody bears tariff burdens. In any case, the world economy would be in a much better position under an international coordination scheme. An economy is only required to enforce a weak international trade agreement for improving global welfare.

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    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/1117.pdf
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    Bibliographic Info

    Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 11-17.

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    Length: 29 pages
    Date of creation: May 2011
    Date of revision:
    Handle: RePEc:osk:wpaper:1117

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    Web page: http://www.econ.osaka-u.ac.jp/
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    Related research

    Keywords: Tariff competition; Transport costs; Reciprocal dumping; Trade agreement; Factor mobility;

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    1. Haaland, Jan I & Wooton, Ian, 1999. " International Competition for Multinational Investment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 631-49, December.
    2. Rodney D. Ludema & Ian Wooton, 1998. "Economic Geography and the Fiscal Effects of Regional Integration," Working Papers 9809, Business School - Economics, University of Glasgow.
    3. Bergstrand, Jeffrey H. & Egger, Peter & Larch, Mario, 2013. "Gravity Redux: Estimation of gravity-equation coefficients, elasticities of substitution, and general equilibrium comparative statics under asymmetric bilateral trade costs," Journal of International Economics, Elsevier, vol. 89(1), pages 110-121.
    4. Lahiri, Sajal & Ono, Yoshiyasu, 1988. "Helping Minor Firms Reduces Welfare," Economic Journal, Royal Economic Society, vol. 98(393), pages 1199-1202, December.
    5. Horn, Henrik & Maggi, Giovanni & Staiger, Robert, 2007. "Trade Agreements as Endogenously Incomplete Contracts," CEPR Discussion Papers 6037, C.E.P.R. Discussion Papers.
    6. Robin Boadway & Katherine Cuff & Nicolas Marceau, 2002. "Inter-Jurisdictional Competition for Firms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(3), pages 761-782, August.
    7. Martin, Philippe & Rogers, Carol Ann, 1995. "Industrial location and public infrastructure," Journal of International Economics, Elsevier, vol. 39(3-4), pages 335-351, November.
    8. Belderbos, Rene & Sleuwaegen, Leo, 1998. "Tariff jumping DFI and export substitution: Japanese electronics firms in Europe," International Journal of Industrial Organization, Elsevier, vol. 16(5), pages 601-638, September.
    9. Michael Pflüger & Jens Südekum, 2004. "Integration, Agglomeration and Welfare," Working Papers of the Research Group Heterogenous Labor 04-24, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim.
    10. Ben Ferrett & Ian Wooton, 2010. "Competing for a duopoly: international trade and tax competition," Canadian Journal of Economics, Canadian Economics Association, vol. 43(3), pages 776-794, August.
    11. Haufler, Andreas & Wooton, Ian, 1997. "Tax Competition for Foreign Direct Investment," CEPR Discussion Papers 1583, C.E.P.R. Discussion Papers.
    12. Ottaviano, Gianmarco I.P. & van Ypersele, Tanguy, 2005. "Market size and tax competition," Journal of International Economics, Elsevier, vol. 67(1), pages 25-46, September.
    13. Haufler, Andreas & Wooton, Ian, 2010. "Competition for firms in an oligopolistic industry: The impact of economic integration," Journal of International Economics, Elsevier, vol. 80(2), pages 239-248, March.
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