Optimal Tariff Policy and Endogenous Market Structure

Cordella, Tito ; Vannini, Stefano (1992) Optimal Tariff Policy and Endogenous Market Structure. Bologna: Dipartimento di Scienze economiche DSE, p. 15. DOI 10.6092/unibo/amsacta/5207. In: Quaderni - Working Paper DSE (150). ISSN 2282-6483.
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Abstract

Strategic trade policy affects foreign-based furn's internationalization mode. In this paper, we endogenize market structure and tariff policy by considering a sequential game in which (i) a policy-maker maximizes national welfare, (ii) aforeign-based furn decides whether to supply the host-country market by exports orby activating a local plant, (iii) a local furn decides whether entering or not the domestic market, (in) both Gums choose output. We show that optimal tariff policy does no tallow for the existence of multinational enterprises at equilibrium (when transportation costs are neglected). Tile link between national welfare and fixed costs is fairly complex and counterintuitive results arise.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Cordella, Tito
Vannini, Stefano
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ISSN
2282-6483
DOI
Deposit date
15 Jun 2016 09:14
Last modified
15 Jun 2016 09:14
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