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Strategic Trade Policy with Heterogeneous Costs

Author

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  • Leahy, Dermot
  • Montagna, Catia

Abstract

The paper examines optimal strategic trade policy under a heterogeneous cost oligopoly. The first-best policy involves a structure of firm-specific export subsidies/taxes in which the government favours the most efficient firms only with a sufficiently low social cost of public funds. Copyright 2001 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research

Suggested Citation

  • Leahy, Dermot & Montagna, Catia, 2001. "Strategic Trade Policy with Heterogeneous Costs," Bulletin of Economic Research, Wiley Blackwell, vol. 53(3), pages 177-182, July.
  • Handle: RePEc:bla:buecrs:v:53:y:2001:i:3:p:177-82
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    Citations

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    Cited by:

    1. Ela Glowicka, 2005. "Bailouts in a Common Market: A Strategic Approach," CIG Working Papers SP II 2005-20, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    2. Katayama, Seiichi & Lahiri, Sajal & Tomiura, Eiichi, 2011. "Cost heterogeneity and the destination of Japanese foreign direct investment: A theoretical and empirical analysis," Japan and the World Economy, Elsevier, vol. 23(3), pages 170-177.
    3. Arghya Ghosh & Souresh Saha, 2008. "Trade Policy in the Presence of Technology Licensing," Review of International Economics, Wiley Blackwell, vol. 16(1), pages 45-68, February.
    4. Naoto Jinji & Tsuyoshi Toshimitsu, 2014. "Strategic Investment Subsidies under Asymmetric Oligopoly," Review of Development Economics, Wiley Blackwell, vol. 18(3), pages 490-501, August.
    5. Hassan Molana & Catia Montagna, 2015. "Selection, Trade, and Employment: the Strategic Use of Subsidies," WWWforEurope Policy Paper series 21, WWWforEurope.
    6. Winston Chang & Hajime Sugeta, 2005. "Cost asymmetry, oligopolistic competition and optimal trade and industrial policies," International Economic Journal, Taylor & Francis Journals, vol. 19(1), pages 95-114.
    7. Hong Hwang & Chao-Cheng Mai & Ya-Po Yang, 2015. "Specific vs Ad Valorem Strategic Export Subsidies with Taxation Distortion," Review of Development Economics, Wiley Blackwell, vol. 19(4), pages 820-828, November.
    8. Liu, Chih-Chen & Mukherjee, Arijit & Wang, Leonard F.S., 2015. "Horizontal merger under strategic tax policy," Economics Letters, Elsevier, vol. 136(C), pages 184-186.
    9. Wang, X. Henry & Zhao, Jingang, 2007. "Welfare reductions from small cost reductions in differentiated oligopoly," International Journal of Industrial Organization, Elsevier, vol. 25(1), pages 173-185, February.
    10. Jinji, Naoto & Toshimitsu, Tsuyoshi, 2013. "Strategic R&D policy in a quality-differentiated industry with three exporting countries," Japan and the World Economy, Elsevier, vol. 28(C), pages 132-142.
    11. Mark Gersovitz, 2006. "The Size Distribution of Firms, Cournot, and Optimal Taxation," IMF Working Papers 06/271, International Monetary Fund.
    12. Tsai, Yingyi & Mukherjee, Arijit & Chen, Jong-Rong, 2016. "Host market competition, foreign FDI and domestic welfare," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 13-22.

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