The paper develops a two-stage duopoly model to investigate the effects of eliminating subsidies to state trading enterprises (STEs) as discussed in the WTO Doha Development Agenda negotiations on agriculture. Unlike the STE, the private firm may choose to integrate vertically in order to avoid...

The paper develops a two-stage duopoly model to investigate the effects of the elimination of subsidies to State Trading Enterprises (STEs) as discussed in the WTO Doha Development Agenda negotiations on agriculture. Unlike the STE, the private firm may choose to integrate vertically in order to...

There is broad empirical evidence showing that regional integration considerably influences the choice of firms over the location of production. Traditional preferential trade theory does not include the driving force of these changes, that is, economies of scale. The paper surveys recent...