This paper develops a theory of strategic outsourcing that arises due to trade liberalization. With trade liberalization, a domestic firm may choose to purchase the intermediate good from a more efficient foreign producer, who also competes with the domestic firm in the final-good market. This...

This paper sets a single monopoly model and examines the effects of various trade policies on domestic, foreign and world economies under both segmented and integrated markets. In the segmented-markets case, the spillover effects which stem from non-constant marginal costs are explicitly dealt...

This paper examines the effects of a movement from segmented markets to integrated markets on the volume of trade, consumer prices, and profits in a monopoly model. The monopolist discriminates prices among segmented markets but takes account of arbitrage under integrated markets. The analysis...