IDEAS home Printed from https://ideas.repec.org/a/ier/iecrev/v28y1987i2p459-68.html

Discriminating Monopoly, Forward Markets and International Trade

Author

Listed:
  • Eldor, Rafael
  • Zilcha, Itzhak

Abstract

This paper analyzes the effect of uncertainty on output and export of a price-discriminating firm which sells its produce both in domestic and world markets. It is shown that under some conditions exports increase when uncertainty is introduced. In the presence of forward markets a "separation theorem" holds and total output increases to the competitive firm level, while exports are larger than those of the competitive firm. Copyright 1987 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Eldor, Rafael & Zilcha, Itzhak, 1987. "Discriminating Monopoly, Forward Markets and International Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(2), pages 459-468, June.
    • Handle: RePEc:ier:iecrev:v:28:y:1987:i:2:p:459-68
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0020-6598%28198706%2928%3A2%3C459%3ADMFMAI%3E2.0.CO%3B2-X&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

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


    Cited by:

    1. Broll, Udo & Zilcha, Itzhak, 1990. "Two-Country Firm: Exchange Rate Uncertainty and Futures Markets," Foerder Institute for Economic Research Working Papers 275483, Tel-Aviv University > Foerder Institute for Economic Research.
    2. Feenstra, Robert C. & Kendall, Jon D., 1997. "Pass-through of exchange rates and purchasing power parity," Journal of International Economics, Elsevier, vol. 43(1-2), pages 237-261, August.
    3. Frank Lehrbass, 1994. "Optimal hedging with currency forwards, calls, and calls on forwards for the competitive exporting firm facing exchange rate uncertainty," Journal of Economics, Springer, vol. 59(1), pages 51-70, February.
    4. Jens Eisenschmidt & Klaus Wälde, 2007. "International Trade, Hedging, and the Demand for Forward Contracts," Review of International Economics, Wiley Blackwell, vol. 15(2), pages 414-429, May.
    5. Broll, Udo & Wahl, Jack E., 1990. "The effect of forward markets and currency options on international trade," Discussion Papers, Series II 114, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    6. Wong Kit Pong, 2002. "Export-Flexible Firms and Forward Markets," International Economic Journal, Taylor & Francis Journals, vol. 16(3), pages 81-95.
    7. Feenstra, R.C. & Kendall, J.D., 1991. "Exchange Rate Volatility and International Prices," Papers 377, California Davis - Institute of Governmental Affairs.
    8. Kit Pong Wong, 2003. "Forward Markets and the Behaviour of the Competitive Firm with Production Flexibility," Bulletin of Economic Research, Wiley Blackwell, vol. 55(3), pages 303-310, July.
    9. Broll, Udo & Zilcha, Itzhak, 1992. "Exchange rate uncertainty, futures markets and the multinational firm," European Economic Review, Elsevier, vol. 36(4), pages 815-826, May.
    10. Eldor, Rafael & Zilcha, Itzhak, 2002. "Tax asymmetry, production and hedging," Journal of Economics and Business, Elsevier, vol. 54(3), pages 345-356.
    11. Lioui, Abraham & Eldor, Rafael, 1998. "Optimal spreading when spreading is optimal," Journal of Economic Dynamics and Control, Elsevier, vol. 23(2), pages 277-301, September.
    12. Kit Pong Wong & Ho Yin Yick, 2004. "Currency Options and Export‐Flexible Firms," Bulletin of Economic Research, Wiley Blackwell, vol. 56(4), pages 379-394, October.
    13. Sung, Hongmo, 1996. "Exchange rate uncertainty, futures markets, and foreign direct investment," ISU General Staff Papers 1996010108000012420, Iowa State University, Department of Economics.
    14. Alejandro Riaño, 2011. "Exports, investment and firm-level sales volatility," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(4), pages 643-663, November.
    15. Wong, Kit Pong, 2007. "Operational and financial hedging for exporting firms," International Review of Economics & Finance, Elsevier, vol. 16(4), pages 459-470.
    16. Wei, Shang-Jin, 1999. "Currency hedging and goods trade," European Economic Review, Elsevier, vol. 43(7), pages 1371-1394, June.
    17. Udo Broll, 1993. "Foreign production and international hedging in a multinational firm," Open Economies Review, Springer, vol. 4(4), pages 425-432, December.
    18. Agathe Côté, "undated". "Exchange Rate Volatility and Trade: A Survey," Staff Working Papers 94-5, Bank of Canada.
    19. Broll, Udo & Wahl, Jack E., 1991. "Hedging export revenue risk using futures and options," Discussion Papers, Series II 143, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    20. Broll, Udo & Wahl, Jack E. & Zilcha, Itzhak, 1995. "Indirect hedging of exchange rate risk," Journal of International Money and Finance, Elsevier, vol. 14(5), pages 667-678, October.
    21. Agathe Cote, 1994. "Exchange Rate Volatility and Trade," International Trade 9406001, University Library of Munich, Germany, revised 28 Jun 1994.
    22. Alejandro Riaño, 2010. "The Decision to Export and the Volatility of Sales," Discussion Papers 10/12, University of Nottingham, GEP.

    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:ier:iecrev:v:28:y:1987:i:2:p:459-68. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/deupaus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.