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Trade Costs, Wage Rates, Technologies, and Reverse Imports

In: Strategic Trade Policy

Author

Listed:
  • Jota Ishikawa
  • Yoshimasa Komoriya

Abstract

This chapter explores the effects of transport costs, tariffs, and foreign wage rates on the domestic economy in the presence of reverse imports, with special emphasis on inter-firm cost asymmetry in an international oligopoly model. To serve the domestic market, a foreign firm produces in the foreign country, while two domestic firms produce either at home or abroad. Surprisingly, an increase in the foreign wage rate may increase the profits of a firm producing in the foreign country. Even if all firms produce in the foreign country, an increase in the foreign wage rate may improve domestic welfare.Coûts du commerce, taux de salaires, technologies, et importations renversées. Ce texte explore les effets des coûts de transport et des taux de salaires àl’étranger sur l’économie domestique quand il y a importations renversées en provenance du pays où on a exporté ses ressources. On met l’accent en particulier sur l’asymétrie des coûts entre firmes dans un modéle d’oligopole international. Pour servir son marché domestique, une firme étrangére produit dans un pays étranger, alors que deux firmes domestiques produisent soit dans leur pays d’origine ou à l’étranger. On note avec surprise qu’un accroissement du taux de salaire à l’étranger peut accroître les profits d’une firme qui produit à l’étranger. Même si toutes les firmes produisent dans un pays étranger, un accroissement du taux de salaire à l’étranger peut améliorer le niveau de bien-être domestique.

Suggested Citation

  • Jota Ishikawa & Yoshimasa Komoriya, 2026. "Trade Costs, Wage Rates, Technologies, and Reverse Imports," World Scientific Book Chapters, in: Strategic Trade Policy, chapter 8, pages 171-200, World Scientific Publishing Co. Pte. Ltd..
  • Handle: RePEc:wsi:wschap:9789819805921_0008
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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F1 - International Economics - - Trade
    • F10 - International Economics - - Trade - - - General
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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