IDEAS home Printed from https://ideas.repec.org/a/cje/issued/v25y1992i1p184-95.html
   My bibliography  Save this article

Optimal Commercial Policy with International Returns to Scale

Author

Listed:
  • Joseph F. Francois

Abstract

This paper examines the implications of international returns to scale and globalization of production for commercial policy. Though national returns justify subsidization for small countries, the first-best policy for small countries acting on their own under international returns is free trade. However, a coalition of such small countries can justify an active, interventionist commercial policy, even when it is unable to manipulate world prices. In general, optimal subsidy rates for increasing returns sectors are greater for a coalition than for its members when acting on their own when terms-of-trade effects are controlled for.

Suggested Citation

  • Joseph F. Francois, 1992. "Optimal Commercial Policy with International Returns to Scale," Canadian Journal of Economics, Canadian Economics Association, vol. 25(1), pages 184-195, February.
  • Handle: RePEc:cje:issued:v:25:y:1992:i:1:p:184-95
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0008-4085%28199202%2925%3A1%3C184%3AOCPWIR%3E2.0.CO%3B2-1
    Download Restriction: only available to JSTOR subscribers

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Eckel, Carsten, 2003. "Does globalization lead to specialization?," Center for European, Governance and Economic Development Research Discussion Papers 20, University of Goettingen, Department of Economics.
    2. Douglas Holtz-Eakin & Mary E. Lovely, 1994. "Technological Linkages, Market Structure, and Optimum Production Policies," NBER Working Papers 4779, National Bureau of Economic Research, Inc.
    3. Joseph F. Francois & Douglas Nelson, 2002. "A Geometry Of Specialisation," Economic Journal, Royal Economic Society, vol. 112(481), pages 649-678, July.
    4. Nobuhito Suga, 2005. "International Economies of Scale and the Gains from Trade," Journal of Economics, Springer, vol. 85(1), pages 73-97, July.
    5. Sajid Anwar, 2001. "Commercial policy and international factor mobility in the presence of monopolistic competition," Journal of Economics, Springer, vol. 74(3), pages 259-281, October.
    6. Eckel, Carsten, 2008. "Globalization and specialization," Journal of International Economics, Elsevier, vol. 75(1), pages 219-228, May.
    7. Anwar, Sajid, 2001. "Government spending on public infrastructure, prices, production and international trade," The Quarterly Review of Economics and Finance, Elsevier, vol. 41(1), pages 19-31.
    8. repec:got:cegedp:20 is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cje:issued:v:25:y:1992:i:1:p:184-95. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Werner Antweiler). General contact details of provider: http://edirc.repec.org/data/ceaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.