Advertisement

Cost Asymmetries and Import Tariff Policy in a Vertically Related Industry

  • Yasushi KawabataEmail author
Chapter
  • 377 Downloads
Part of the New Frontiers in Regional Science: Asian Perspectives book series (NFRSASIPER, volume 10)

Abstract

This chapter examines the effects of the cost asymmetry of final goods production and the cost difference in intermediate goods production on the import tariffs on both goods imposed by two countries’ governments in a model with vertically related markets characterized by Cournot duopolies. It is shown that the country with the highest-cost final (intermediate) goods firm may levy the lowest import tariff on the final (intermediate) goods.

Keywords

Import tariff Vertically related markets Cournot duopoly 

Notes

Acknowledgements

This work has been financially supported by a Grant-in-Aid for Scientific Research (B) (No. 25285079).

References

  1. Bandyopadhyay, S. 1997. Demand elasticities, asymmetry and strategic trade policy. Journal of International Economics 42: 167–177.CrossRefGoogle Scholar
  2. Bernhofen, D.M. 1995. Price dumping in the intermediate good markets. Journal of International Economics 39: 159–173.CrossRefGoogle Scholar
  3. Bernhofen, D.M. 1997. Strategic trade policy in a vertically related industry. Review of International Economics 5: 429–433.CrossRefGoogle Scholar
  4. Brander, J.A., and B.J. Spencer. 1984. Tariff protection and imperfect competition. In Monopolistic competition and international trade, ed. H. Kierzkowski, 194–206. Oxford: Clarendon Press.Google Scholar
  5. Brander, J.A., and B.J. Spencer. 1985. Export subsidies and international market share rivalry. Journal of International Economics 18: 83–100.CrossRefGoogle Scholar
  6. Chang, W.W., and H. Sugeta. 2004. Conjectural variations, market power, and optimal trade policy in a vertically related industry. Review of International Economics 12: 12–26.CrossRefGoogle Scholar
  7. Clarke, R., and D.R. Collie. 2006. Export taxes under Bertrand duopoly. Economics Bulletin 6: 1–8.Google Scholar
  8. Collie, D.R. 1991. Export subsidies and countervailing tariffs. Journal of International Economics 31: 309–324.CrossRefGoogle Scholar
  9. Collie, D.R. 1994. Endogenous timing in trade policy games: Should governments use countervailing duties? Weltwirschaftliches Archiv 130: 191–209.CrossRefGoogle Scholar
  10. de Meza, D. 1986. Export subsidies and high productivity: Cause or effect? Canadian Journal of Economics 19: 347–350.CrossRefGoogle Scholar
  11. Eaton, J., and G.M. Grossman. 1986. Optimal trade and industrial policy under oligopoly. Quarterly Journal of Economics 101: 383–406.CrossRefGoogle Scholar
  12. Escaith, H., and S. Inomata (eds.). 2011. Trade patterns and global value chains in East Asia: From trade in goods to trade in tasks. Geneva: IDE-JETRO and World Trade Organization.Google Scholar
  13. Hwang, H., Y.-S. Lin, and Y.-P. Yang. 2007. Optimal trade policies and production technology in vertically related markets. Review of International Economics 15: 823–835.CrossRefGoogle Scholar
  14. Ishikawa, J., and K.-D. Lee. 1997. Backfiring tariffs in vertically related markets. Journal of International Economics 42: 395–423.CrossRefGoogle Scholar
  15. Ishikawa, J., and B.J. Spencer. 1999. Rent-shifting export subsidies with an imported intermediate product. Journal of International Economics 48: 199–232.CrossRefGoogle Scholar
  16. Kawabata, Y. 2010. Strategic export policy in vertically related markets. Bulletin of Economic Research 62: 109–131.CrossRefGoogle Scholar
  17. Kawabata, Y. 2012. Cost asymmetries and industrial policy in vertically related markets. The Manchester School 80: 633–649.CrossRefGoogle Scholar
  18. Neary, J.P. 1994. Cost asymmetries in international subsidy games: Should governments help winners or losers? Journal of International Economics 37: 197–218.CrossRefGoogle Scholar

Copyright information

© Springer Japan 2016

Authors and Affiliations

  1. 1.Graduate School of EconomicsNagoya City UniversityMizuho-ku, NagoyaJapan

Personalised recommendations