When subsidies and tariffs are applied to imports with fluctuating prices, it is shown that the output response of domestic producers depends on market structure and their attitude toward risk. The domestic industry response is contrasted under two types of market structure, a monopoly and a...

In this paper we investigate how strategic aspects influence the choice between exporting and servicing foreign markets by setting up a plant in the foreign country. We show that tariffs on imports in conjunction with the size of the set up costs incurred while setting up plants and the size of...

This paper studies the implications of various contracting alternatives between exporting and importing firms on the value of production and international transactions. Since contracts are usually determined when exchange rate is uncertain, we show that under some conditions renegotiating these...

This paper provides an explanation for the choice of currency of invoice of exports to the U.S. We find an empirical relationship between the riskiness of the exchange rate and the fraction of imports invoiced in the importer¡¯s currency, the exporter¡¯s currency, and a third country...

A monopolist facing a market of heterogeneous consumers will distort the quality a rray. This paper explores three regulatory remedies-minimum quality s tandards (MQS), maximum price regulation (MPR), and rate of return re gulation (RORR)-that can counteract this distortion. MQS and MPR rais e...