By taking into account factor market interactions, the theory of strategic trade policies can consistently explain the fact that less efficient countries offer greater export subsidies to the most technologically advanced industries because in these countries there may be greater differences in...

Using the Nash bargaining approach, this paper analyzes the negotiation of tariffs between two countries in free-entry oligopolies under integrated markets. Employing a symmetric model with linear demand and cost functions, the paper shows that for both countries Pareto-efficient negotiated...