Author: Barbara J. SpencerPublisher:
ISBN:
Category :
Languages : es
Pages : 35
Book Description
Vertical foreclosure and international trade policy
Author: Barbara J. SpencerVertical Foreclosure and International Trade Policy
Author: Vertical Foreclosure and International Trade Policy
Author: Barbara J. SpencerPublisher:
ISBN:
Category : Competing, International
Languages : en
Pages : 52
Book Description
We examine conditions under which a low cost vertically integrated manufacturer has an incentive to export an intermediate product to its higher cost (vertically integrated) rival rather than to vertically foreclose, fully cutting off supplies. The nature of supply conditions in the importing country, the size of an import tariff on the final good and optimal policy by the exporting country are all shown to be important for this decision. The exporting country may gain by taxing exports of the final (Cournot) product even though, under Cournot competition, an export subsidy is optimal in the absence of a market for intermediates. In this case, optimal policy also requires an export tax on intermediates, but the higher tax on final goods serves to divert sales to the more profitable market for intermediates increasing the extent of vertical supply. It is optimal to tax the export of both goods or to subsidize the export of both goods. It is never optimal to tax one and subsidize the other.
Trade and Protection in Vertically Related Markets
Author: Barbara J. SpencerPublisher:
ISBN:
Category : Commercial policy
Languages : en
Pages : 52
Book Description
A domestic firm is partially dependent on a foreign vertically integrated supplier for a key intermediate product when both firms are Cournot competitors in the market for the final product. The foreign supplier generally charges its domestic rival a price for the input that exceeds the independent monopoly level and vertical foreclosure may occur. Domestic policies applied to the vertically related products can increase domestic welfare by reducing the price and increasing the availability of imported supplies of the input. Vertical integration in the foreign supplier has significant implications for all three domestic policies considered: a tariff or subsidy on imports of both products and a domestic production subsidy. The foreign vertically integrated firm tends to reduce its price for the input in response to an import tariff on the final product, whereas a simple monopoly supplier would respond by increasing its export price. Also domestic cost conditions for the production of the input can critically affect the desirability of a tax as apposed to a subsidy on intermediate imports.
Vertical Foreclosure
Author: Vertical Relationships and the Firm in the Global Economy
Author: Khalid SekkatPublisher: Edward Elgar Publishing
ISBN: 9781781958254
Category : Political Science
Languages : en
Pages : 200
Book Description
This book analyses the vertical relationships of firms in an international context. These relationships, Khalid Sekkat argues, have gained further relevance due to the notable increase in vertical specialization of production across borders in the past few years.
Vertical Integration and Regulation
Author: Christoph KleinebergPublisher: Springer
ISBN: 3030113582
Category : Law
Languages : en
Pages : 72
Book Description
This book investigates under which circumstances vertical unbundling can lead to a more efficient market result. The assessment is based on an interdisciplinary approach combining law and economics. Drawing on the assessment, circumstances are subsequently presented under which unbundling might become necessary. Additionally, less severe means of regulatory intervention are suggested in order to protect competition. Given its scope, the book is chiefly intended for scholars and practitioners in the field of economic policy and regulation law; in addition, it will give interested members of the public a unique opportunity to learn about the underlying rationales of regulation law and regulation economics.
Empirical Evidence on Vertical Foreclosure
Author: Eric S. RosengrenPublisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 38
Book Description
Strategic Trade Policy when Domestic Firms Compete Against Vertically Integrated Rivals
Author: Dani RodrikPublisher:
ISBN:
Category : Commercial policy
Languages : en
Pages : 44
Book Description
This paper models the international competition between a domestic firm and its vertically integrated foreign rival. The domestic firm has the choice of developing its own production capability for an intermediate input, or of importing it from the foreign firm at a price set by the latter. In this setting, and under reasonable cost assumptions, the foreign firm will always choose to supply the domestic firm as long as it cannot monopolize the final-good market by withholding supply. A tariff placed on the imports of the input by the home government will be borne entirely by the foreign firm, and will be welfare increasing. When the home government chooses to subsidize the domestic firm's fixed development costs for the input, the optimal subsidy will exceed the total fixed costs required, but will not have to be disbursed in equilibrium. A tariff on the final good will enhance the home firm's profits not only by increasing the costs of its rival, but also by reducing its own input costs.
Theory, Policy and Dynamics in International Trade
Author: Wilfred J. EthierPublisher: Cambridge University Press
ISBN: 9780521558525
Category : Business & Economics
Languages : en
Pages : 312
Book Description
This book presents a representative collection of papers on international trade, one of the most dynamic sub-fields in economics. The contributions range over all the major areas of research, including articles on the geographical aspects of international trade by Paul Krugman and Alan Deardorff, on dynamic stochastic economies by Avinash Dixit, and on endogenous growth by Gene Grossman and Elhanan Helpman. In addition to the theoretical contributions, the book also contains work on important policy issues such as auction quotas, discussed by Kala Krishna, and the role of government in economic development, by Anne Krueger. Also included is an assessment by Bill Ethier of the theoretical achievements of a leading authority in international trade theory, Ronald Jones, in whose honour the essays were written.