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Price Discrimination in the Transport Industry and the Gains from Trade

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  • Zheng, Han

Abstract

This paper shows that the shipping industry could hamper the endogenous firm selection into production which is conducive to the overall productivity enhancement and welfare gains, through its discriminatory price. Naturally, if the shipping industry charges a higher transport price to the more productive manufacturing firms, sabotaging their competitive edges, those productive firms would not be capable of expanding as well as they otherwise would do under uniform transport fees, leaving enough space for the less productive firms to survive. Therefore, the effect from another source of gains from trade, firm selection is dampened. Elimination of this discriminatory practice could potentially increase the gains from trade.

Suggested Citation

  • Zheng, Han, 2021. "Price Discrimination in the Transport Industry and the Gains from Trade," Discussion paper series HIAS-E-113, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    • Handle: RePEc:hit:hiasdp:hias-e-113
    Note: September 18, 2021
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    References listed on IDEAS

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    Cited by:

    1. Ardelean,Adina Teodora & Lugovskyy,Volodymyr & Skiba,Alexandre & Terner,David Michael, 2022. "Fathoming Shipping Costs : An Exploration of Recent Literature, Data, and Patterns," Policy Research Working Paper Series 9992, The World Bank.

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    More about this item

    Keywords

    Price discrimination; Shipping industry; Heterogeneous firms; The gains from trade;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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