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The Profits Of Firms And Countervailing Duties In Vertically Related Markets

Author

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  • YU-TER WANG

    (Department of Economics, Ming Chuan University, Taiwan)

Abstract

This paper studies the relationship between the profits of firms and countervailing duties in vertically related markets characterized by oligopolies. It is shown that a countervailing duty equal to the foreign export subsidy is required to neutralize the impact of foreign export subsidies on the profits of domestic firms. The domestic country has an incentive to impose a countervailing duty on foreign final goods even though foreign governments only subsidize exports of intermediate goods. In addition, foreign exporting firms may benefit from a countervailing duty more than a foreign export subsidy.

Suggested Citation

  • Yu-Ter Wang, 2010. "The Profits Of Firms And Countervailing Duties In Vertically Related Markets," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 55(04), pages 749-756.
    • Handle: RePEc:wsi:serxxx:v:55:y:2010:i:04:n:s0217590810004036
    DOI: 10.1142/S0217590810004036
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    Cited by:

    1. Yasushi Kawabata, 2020. "Strategic export policy towards raw materials in vertically related markets," International Journal of Economic Policy Studies, Springer, vol. 14(1), pages 239-253, February.

    More about this item

    Keywords

    Profits; countervailing duties; foreign export subsidies; vertically related markets; F12; F13; L13;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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