Trade and Strategic Regulatory Bias in Monopolistic Industries
Regulatory standards, such as on health and safety, may be subject to strategic bias when a country engages in trade. Where regulation is to correct an undersupply of quality by a monopolistic industry, if regulators do not cooperate and …rms can vary standards, there will be a tendency to strategic overregulation, which leads to excessive, rather than inadequate trade. When there is a mixture of horizontal and vertical quality regulations, the profit-shifting motive for protection is less than the previous literature suggests. In this case, contrary to previous findings, mutual recognition agreements lead to underregulation.
|Date of creation:||Sep 2004|
|Date of revision:||Sep 2004|
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- Das, Satya P. & Donnenfeld, Shabtai, 1989. "Oligopolistic competition and international trade : Quantity and quality restrictions," Journal of International Economics, Elsevier, vol. 27(3-4), pages 299-318, November.
- H. Lutz, Stefan, 2000.
"Trade Effects of Minimum Quality Standards with and without Deterred Entry,"
Journal of Economic Integration,
Center for Economic Integration, Sejong University, vol. 15, pages 314-344.
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"Standards and protection,"
Journal of International Economics,
Elsevier, vol. 52(2), pages 377-400, December.
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- George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
- Lutz, Stefan, 1996. "Vertical Product Differentiation, Quality Standards, and International Trade Policy," CEPR Discussion Papers 1443, C.E.P.R. Discussion Papers.
- Swann, Peter & Temple, Paul & Shurmer, Mark, 1996. "Standards and Trade Performance: The UK Experience," Economic Journal, Royal Economic Society, vol. 106(438), pages 1297-1313, September.
- Greenaway, David, 1987. "The New Theories of Intra-industry Trade," Bulletin of Economic Research, Wiley Blackwell, vol. 39(2), pages 95-120, April.
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