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Tariff Policy and Multinational Firms : How to Jump Tariff Jumping

Author

Listed:
  • CORDELLA, Tito

    (CORE, Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium and Universita di Bologna, Itally)

  • VANNINI, Stefano

    (niversité catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium)

Abstract

Strategic trade policy affects foreign-based firm's internationalization mode. In this paper, by endogenizing market structure and tariff policy, we claim that 'tariff jumping' is not enough to give a rationale to the existence of multinational enterprises, in absence of cost differentials and 'exportation costs' other than tariffs. Despite this first negative result, we show that the study of the strategic interaction between firms and policy-makers, even in such a simple framework, sheds some light on the relationship between national welfare and MNE's competitive advantages, putting on evidence tariff-policy discontinuities.

Suggested Citation

  • CORDELLA, Tito & VANNINI, Stefano, 1993. "Tariff Policy and Multinational Firms : How to Jump Tariff Jumping," LIDAM Discussion Papers CORE 1993056, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:1993056
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp1993.html
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    Citations

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    Cited by:

    1. Bughin, Jacques & Vannini, Stefano, 1995. "Strategic direct investment under unionized oligopoly," International Journal of Industrial Organization, Elsevier, vol. 13(1), pages 127-145, March.

    More about this item

    Keywords

    multinational entreprises; tariff policy; tariff jumping; strategic interaction;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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