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Intra-Industry Trade And Strategic Trade Police In The Presence of Public Firms

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  • Debashis Pal
  • Mark White

Abstract

The literature on intra-industry trade and strategic trade policy has always considered only profit-maximizing private firms being active in international trade. This paper incorporates state-owned public firms in the context of intra-industry trade. The existence of welfare-maximizing public firms significantly affects intra-industry trade and strategic trade policy. Compared to when both firms are private, the existence of public firms lowers optimal tariffs and subsidies, but also lowers the total volume of trade between the two countries. The lower volume of trade, however, does not translate into lower levels of welfare for the trading countries. [F12, F13, D43, L32]

Suggested Citation

  • Debashis Pal & Mark White, 2003. "Intra-Industry Trade And Strategic Trade Police In The Presence of Public Firms," International Economic Journal, Taylor & Francis Journals, vol. 17(4), pages 29-41.
  • Handle: RePEc:taf:intecj:v:17:y:2003:i:4:p:29-41
    DOI: 10.1080/751248070
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    References listed on IDEAS

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    1. Brander, James & Krugman, Paul, 1983. "A 'reciprocal dumping' model of international trade," Journal of International Economics, Elsevier, vol. 15(3-4), pages 313-321, November.
    2. repec:aei:rpbook:53134 is not listed on IDEAS
    3. Lorenz NETT, 1993. "Mixed Oligopoly With Homogeneous Goods," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 64(3), pages 367-393, July.
    4. Brander, James A., 1981. "Intra-industry trade in identical commodities," Journal of International Economics, Elsevier, vol. 11(1), pages 1-14, February.
    5. Debashis Pal & Mark D. White, 1998. "Mixed Oligopoly, Privatization, and Strategic Trade Policy," Southern Economic Journal, Southern Economic Association, vol. 65(2), pages 264-281, October.
    6. de Fraja, Giovanni & Delbono, Flavio, 1989. "Alternative Strategies of a Public Enterprise in Oligopoly," Oxford Economic Papers, Oxford University Press, vol. 41(2), pages 302-311, April.
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    Citations

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    Cited by:

    1. Matsushima, Noriaki & Takauchi, Kazuhiro, 2014. "Port privatization in an international oligopoly," Transportation Research Part B: Methodological, Elsevier, vol. 67(C), pages 382-397.
    2. Xu, Lili & Lee, Sang-Ho & Wang, Leonard, 2017. "Strategic Trade and Privatization Policies in Bilateral Mixed Markets," MPRA Paper 80340, University Library of Munich, Germany.
    3. repec:pal:marecl:v:20:y:2018:i:2:d:10.1057_s41278-016-0004-1 is not listed on IDEAS
    4. repec:ebl:ecbull:v:6:y:2008:i:37:p:1-7 is not listed on IDEAS
    5. Ngo Van Long & Frank Staehler, 2007. "Public Ownership and Trade Policy," CIRANO Working Papers 2007s-07, CIRANO.
    6. Rupayan Pal, 2010. "How much should you own? Cross-ownership and privatization," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2010-015, Indira Gandhi Institute of Development Research, Mumbai, India.
    7. Alessandra Chirco & Marcella Scrimitore, 2017. "Privatization in an International Mixed Oligopoly: the Role of Product Differentiation under Price Competition," EERI Research Paper Series EERI RP 2017/06, Economics and Econometrics Research Institute (EERI), Brussels.
    8. Xu, Lili & Lee, Sang-Ho & Wang, Leonard F.S., 2016. "Free trade agreements and privatization policy with an excess burden of taxation," Japan and the World Economy, Elsevier, vol. 37, pages 55-64.
    9. Ngo Long & Frank Staehler, 2008. "How does state ownership affect optimal export taxes?," Economics Bulletin, AccessEcon, vol. 6(37), pages 1-7.

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