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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.
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    3. repec:aei:rpbook:53134 is not listed on IDEAS
    4. Debashis Pal & Mark D. White, 1998. "Mixed Oligopoly, Privatization, and Strategic Trade Policy," Southern Economic Journal, John Wiley & Sons, vol. 65(2), pages 264-281, October.
    5. Lorenz NETT, 1993. "Mixed Oligopoly With Homogeneous Goods," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 64(3), pages 367-393, July.
    6. Brander, James A., 1981. "Intra-industry trade in identical commodities," Journal of International Economics, Elsevier, vol. 11(1), pages 1-14, February.
    7. 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. Kangsik Choi & Seonyoung Lim, 2018. "Tariff protection and port privatization: An import-competing approach," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 20(2), pages 228-252, June.
    2. repec:ebl:ecbull:v:6:y:2008:i:37:p:1-7 is not listed on IDEAS
    3. 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.
    4. 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.
    5. Ngo Van Long & Frank Stähler, 2009. "Trade policy and mixed enterprises," Canadian Journal of Economics, Canadian Economics Association, vol. 42(2), pages 590-614, May.
    6. Ngo Van Long & Frank Staehler, 2007. "Public Ownership and Trade Policy," CIRANO Working Papers 2007s-07, CIRANO.
    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. Matsushima, Noriaki & Takauchi, Kazuhiro, 2014. "Port privatization in an international oligopoly," Transportation Research Part B: Methodological, Elsevier, vol. 67(C), pages 382-397.
    9. Ngo Long & Frank Staehler, 2008. "How does state ownership affect optimal export taxes?," Economics Bulletin, AccessEcon, vol. 6(37), pages 1-7.
    10. DongJoon Lee & Seonyoung Lim & Kangsik Choi, 2017. "Port privatization under Cournot vs. Bertrand competition: a third-market approach," Maritime Policy & Management, Taylor & Francis Journals, vol. 44(6), pages 761-778, August.
    11. Cho, Sumi & Kim, Doori & Lee, Sang-Ho, 2021. "Free licensing strategy and ex post privatization in a mixed oligopoly," MPRA Paper 106126, University Library of Munich, Germany.
    12. Xu, Lili & Lee, Sang-Ho, 2021. "Strategic Corporate Social Responsibility by a Multinational Firm and International Privatization Policies," MPRA Paper 105651, University Library of Munich, Germany.
    13. Lee, Sang-Ho & Xu, Lili, 2017. "Tariffs and Privatization Policy in a Bilateral Trade Model with Corporate Social Responsibility," MPRA Paper 82042, University Library of Munich, Germany.
    14. 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.
    15. Ali Dadpay, 2020. "An Analysis of Fuel Smuggling in the Middle East as a Single Multinational Market," Journal of Industry, Competition and Trade, Springer, vol. 20(4), pages 643-656, December.
    16. Marco Catola & Alessandra Chirco & Marcella Scrimitore, 2023. "Privatization in an International Mixed Oligopoly: the Role of Product Differentiation under Price Competition," Discussion Papers 2023/301, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

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