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Upstream ownership and export policy reversal

Author

Listed:
  • Po-Sheng Ko

    (Department of Public Finance and Taxation, NKUST, Taiwan)

  • Chien-Hui Lee

    (Department of International Business, NKUST, Taiwan.)

  • Jen-Yao Lee

    (Department of International Business, NKUST, Taiwan.)

  • Yun-Ru Li

    (Dept. of International Business, NKUST, Taiwan; Dept. of Management, AFIT, Taiwan)

Abstract

This note shows that upstream ownership can reverse the standard result in strategic trade policy. In a vertically related market, we demonstrate that partial ownership weakens vertical rent extraction and turns export taxation into export subsidization under discriminatory pricing. Under uniform pricing, ownership strengthens the incentive to subsidize exports and may lead to the exit of the foreign firm. These results highlight the importance of ownership structure in determining trade policy.

Suggested Citation

  • Po-Sheng Ko & Chien-Hui Lee & Jen-Yao Lee & Yun-Ru Li, 2026. "Upstream ownership and export policy reversal," Economics Bulletin, AccessEcon, vol. 46(2), pages 558-567.
    • Handle: RePEc:ebl:ecbull:eb-26-00260
    as

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    References listed on IDEAS

    as
    1. Jonathan Eaton & Gene M. Grossman, 1986. "Optimal Trade and Industrial Policy Under Oligopoly," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(2), pages 383-406.
    2. Bernhofen, Daniel M, 1997. "Strategic Trade Policy in a Vertically Related Industry," Review of International Economics, Wiley Blackwell, vol. 5(3), pages 429-433, August.
    3. Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • F1 - International Economics - - Trade

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