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Strategic Trade Policy for Exporting Industries: More General Results in the Oligopolistic Case

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  • Klette, Tor Jakob

Abstract

This paper examines the optimal trade policy for exporting firms in oligopolistic industries. The analysis is based on a minimum set of restrictions on the profit functions and with an arbitrary number of domestic and foreign producers. In an industry with quantity competition, a simple rule is derived that shows how to determine the direction of an optimal trade policy in terms of a few characteristics of the model. The analysis makes clear how scale economies (in a particular sense) favor the case for an export subsidy, while product differentiation tends to support the case for an export tax. Copyright 1994 by Royal Economic Society.

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  • Klette, Tor Jakob, 1994. "Strategic Trade Policy for Exporting Industries: More General Results in the Oligopolistic Case," Oxford Economic Papers, Oxford University Press, vol. 46(2), pages 296-310, April.
    • Handle: RePEc:oup:oxecpp:v:46:y:1994:i:2:p:296-310
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    Cited by:

    1. Mustafa Caglayan & Murat Usman, 2004. "Incompletely informed policymakers and trade policy in oligopolistic industries," Manchester School, University of Manchester, vol. 72(3), pages 283-297, June.
    2. Pedro P. Barros & Tore Nilssen, 1999. "Industrial Policy and Firm Heterogeneity," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 597-616, December.
    3. Marco Di Cintio, 2015. "Intra-Sector and Inter-Sector Competition in a Model of Growth," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2015(116), pages 74-89.
    4. Eromenko, Igor & Lisenkova, Katerina, 2006. "Impact of joining the WTO on Ukrainian ferrous metallurgy: subsidies vs. antidumping, is there really a trade-off?," MPRA Paper 67477, University Library of Munich, Germany.
    5. Thorsten Bayındır‐Upmann, 2003. "Strategic Environmental Policy under Free Entry of Firms," Review of International Economics, Wiley Blackwell, vol. 11(2), pages 379-396, May.

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