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Strategic Export Decisions in International Trade

Author

Listed:
  • Kazuhiro Takauchi

    (Faculty of Business and Commerce, Kansai University and Graduate School of Economics, Kobe University, JAPAN)

  • Tomomichi Mizuno

    (Graduate School of Economics, Kobe University, JAPAN)

  • Katsufumi Fukuda

    (School of Global Studies, Chukyo University and Research Institute for Economics & Business Administration (RIEB), Kobe University, JAPAN)

Abstract

The type of marginal cost faced by a firm is important when considering the firm's export behavior. However, in the literature, it is frequently assumed that firms have constant marginal costs. By contrast, this paper considers the case in which a firm's marginal cost is increasing, and the firm pays a fixed cost when it exports. We show that an asymmetric trade pattern, whereby one country exports but the other does not, appears in a symmetric two-country two-firm setting. We also show that trade liberalization produces a non-monotonic change in welfare because of reduced transport costs.

Suggested Citation

  • Kazuhiro Takauchi & Tomomichi Mizuno & Katsufumi Fukuda, 2024. "Strategic Export Decisions in International Trade," Discussion Paper Series DP2024-21, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:dp2024-21
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    References listed on IDEAS

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    More about this item

    Keywords

    Increasing marginal cost; Fixed export cost; Transport cost; Trade pattern;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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