The authors propose a new model of trade between developing and advanced economies to capture the effects of important asymmetries in the organizations of their industries. This model demonstrates how the industrial structure of a developing economy can evolve to produce what the authors call...

Along the lines of the strategic trade policy inquiry under vertical structures we show that two rival governments may select different rates of export subsidies and import tariffs respectively upon their own industries even if their marginal costs are identical. Moreover, regardless of any...