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Political Economy Of Strategic Export Policy In A Differentiated Duopoly

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  • KOICHI KAGITANI

Abstract

This paper investigates the effect of a home firm's lobbying on a strategic export policy in a third market with a differentiated duopoly. We focus on its effect on domestic welfare under Bertrand and Cournot competition. Regardless of the mode of competition, the strategic export policy cannot improve domestic welfare in the presence of lobbying if the degree of product differentiation is high or the government is overly concerned with political contribution relative to domestic welfare. Moreover, for the same degree of product differentiation, the lobbying‐induced export policy is more likely to deteriorate domestic welfare relative to free trade under Cournot competition.

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  • Koichi Kagitani, 2009. "Political Economy Of Strategic Export Policy In A Differentiated Duopoly," The Japanese Economic Review, Japanese Economic Association, vol. 60(2), pages 236-252, June.
    • Handle: RePEc:bla:jecrev:v:60:y:2009:i:2:p:236-252
    DOI: 10.1111/j.1468-5876.2008.00446.x
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    References listed on IDEAS

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    3. Sang-Kee Kim & Young-Han Kim, 2020. "Welfare implications of upstream subsidy in the presence of countervailing duties under limited verifiability," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(3), pages 643-663, June.
    4. Teng Wang, 2011. "Lobbying paradox of strategic export policy in a differentiated duopoly," International Economics and Economic Policy, Springer, vol. 8(3), pages 323-336, September.

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