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Trade policy and mixed enterprises

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  • Ngo Van Long
  • Frank Stähler

Abstract

This paper demonstrates that the degree of state ownership affects neither the level of socially optimal activities nor welfare if the government chooses optimal trade policy instruments. In the case of rivalry in the home market, the optimal import tariff is independent of the degree of state ownership, and the optimal production subsidy decreases with state ownership if the optimal tariff is positive. For the case of Cournot rivalry in a third market, the optimal export subsidy increases with state ownership, while in the case of Bertrand rivalry with differentiated products, the optimal export tax increases with state ownership.

Suggested Citation

  • Ngo Van Long & Frank Stähler, 2009. "Trade policy and mixed enterprises," Canadian Journal of Economics, Canadian Economics Association, vol. 42(2), pages 590-614, May.
    • Handle: RePEc:cje:issued:v:42:y:2009:i:2:p:590-614
    DOI: 10.1111/j.1540-5982.2009.01520.x
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    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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