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Foreign equity caps under two types of competition: Bertrand and Cournot

Author

Listed:
  • Hiroshi Kurata

    (Ritsumeikan University)

Abstract

This paper explores foreign equity caps for international joint ventures under different types of competition, i.e., Bertrand and Cournot competition, with product differentiation. We demonstrate that government sets the foreign equity cap at a laxer level under Cournot competition than under Bertrand competition. This result illustrates that the possibility of international joint ventures weakens government's ability to affect firm behavior through the implementation of foreign equity caps.

Suggested Citation

  • Hiroshi Kurata, 2007. "Foreign equity caps under two types of competition: Bertrand and Cournot," Economics Bulletin, AccessEcon, vol. 6(21), pages 1-11.
    • Handle: RePEc:ebl:ecbull:eb-07f10011
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    References listed on IDEAS

    as
    1. Roger Clarke & David R. Collie, 2006. "Optimum‐Welfare And Maximum‐Revenue Tariffs Under Bertrand Duopoly," Scottish Journal of Political Economy, Scottish Economic Society, vol. 53(3), pages 398-408, July.
    2. David Collie & Roger Clarke, 2006. "Export Taxes under Bertrand Duopoly," Economics Bulletin, AccessEcon, vol. 6(6), pages 1-8.
    3. Cheng, Leonard K, 1988. "Assisting Domestic Industries under International Oligopoly: The Relevance of the Nature of Competition to Optimal Policies," American Economic Review, American Economic Association, vol. 78(4), pages 746-758, September.
    4. repec:ebl:ecbull:v:6:y:2004:i:20:p:1-9 is not listed on IDEAS
    5. Yasunobu Tomoda & Hiroshi Kurata, 2004. "Foreign equity caps for international joint ventures," Economics Bulletin, AccessEcon, vol. 6(20), pages 1-9.
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    More about this item

    Keywords

    Foreign equity caps Cournot competition Bertrand competiton Product differentiation;

    JEL classification:

    • F1 - International Economics - - Trade

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