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Trade, Vertical Production Chain, and Competition Policy

Author

Listed:
  • Makoto Yano
  • Fumio Dei

Abstract

The authors build a trade model that renders tractable the process in which imperfect competition in a country's downstream sector affects the rest of the world through international trade. For this purpose, internationally traded goods are viewed as middle products in the vertical chain of production, in which middle products are produced upstream and transformed into final consumption goods downstream. Suppression of competition in a country's downstream sector may serve as a beggar‐thy‐neighbor policy, increasing that country's own utility while reducing that of its trading partner countries.

Suggested Citation

  • Makoto Yano & Fumio Dei, 2003. "Trade, Vertical Production Chain, and Competition Policy," Review of International Economics, Wiley Blackwell, vol. 11(2), pages 237-252, May.
    • Handle: RePEc:bla:reviec:v:11:y:2003:i:2:p:237-252
    DOI: 10.1111/1467-9396.00380
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    References listed on IDEAS

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    1. Dixit, Avinash, 1984. "International Trade Policy for Oligopolistic Industries," Economic Journal, Royal Economic Society, vol. 94(376a), pages 1-16, Supplemen.
    2. Bandyopadhyay, Usree, 1998. "Distribution Costs and International Trade: A Ricardian Model," Review of International Economics, Wiley Blackwell, vol. 6(1), pages 164-178, February.
    3. Kalyan K. Sanyal & Ronald W. Jones, 2018. "The Theory of Trade in Middle Products," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 13, pages 203-231, World Scientific Publishing Co. Pte. Ltd..
    4. Jones, Ronald W. & Peter Neary, J., 1984. "The positive theory of international trade," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 1, pages 1-62, Elsevier.
    5. Horn, Henrik & Levinsohn, James, 2001. "Merger Policies and Trade Liberalisation," Economic Journal, Royal Economic Society, vol. 111(470), pages 244-276, April.
    6. Falvey, R. & Lloyd, P.J., 1999. "An Economic Analysis of Extraterritoriality," Department of Economics - Working Papers Series 675, The University of Melbourne.
    7. Yano, Makoto, 2001. "Trade Imbalance and Domestic Market Competition Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(3), pages 729-750, August.
    8. R. Melvin, James & Warne, Robert D., 1973. "Monopoly and the theory of international trade," Journal of International Economics, Elsevier, vol. 3(2), pages 117-134, May.
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    Cited by:

    1. Yano, Makoto & Honryo, Takakazu, 2010. "Trade imbalances and harmonization of competition policies," Journal of Mathematical Economics, Elsevier, vol. 46(4), pages 438-452, July.
    2. repec:ebl:ecbull:v:6:y:2008:i:24:p:1-5 is not listed on IDEAS
    3. Toru Kikuchi, 2008. "Distribution Costs, International Trade and Industrial Location," Economics Bulletin, AccessEcon, vol. 6(24), pages 1-5.
    4. Ma, Yan, 2009. "Trade theorems in a model of vertical production chain," International Review of Economics & Finance, Elsevier, vol. 18(1), pages 70-80, January.

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