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Several developing countries impose high tariffs, directly or indirectly, on imports of manufactured goods such as vehicles and machinery. In many cases governments argue that they need such policies to protect domestic manufacturing industries from foreign competition while simultaneously...
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Persistent link: https://www.econbiz.de/10009679104
In a model of vertical product differentiation, duopolistic firms face quality-dependent costs and compete in quality and price in two segmented markets. Minimum quality standards, set uniformly or according to the principle of Mutual Recognition, can be used to increase welfare. The analysis...
Persistent link: https://www.econbiz.de/10014104830
We present a model of vertical product differentiation and exit where a domestic and a foreign firm face fixed setup costs and quality-dependent costs of production and compete in quality and price in the domestic market. Quality-dependent costs are quadratic in qualities, but independent of the...
Persistent link: https://www.econbiz.de/10013155656
With outsourcing comes a perceived tension between the competitive pressures faced by domestic firms and the effect … that outsourcing has on domestic workers. To address this tension, we present a general-equilibrium model with an … oligopolistic export sector and a competitive import-competing sector. When there is a minimum wage, an outsourcing tax might be …
Persistent link: https://www.econbiz.de/10012783501
Post-production services, such as sales, distribution, and maintenance, comprise a crucial element of business activity. A foreign firm faces a higher cost to perform such services than its domestic rival because of the lack of proximity to customers. We explore an international duopoly model in...
Persistent link: https://www.econbiz.de/10014217739
In a two-country international trade model with oligopolistic competition, we study the conditions on market structure and trade costs under which a merger policy designed to benefit domestic consumers is too tough or too lenient from the viewpoint of the foreign country. Calibrating the model...
Persistent link: https://www.econbiz.de/10011481156
We study the gains from trade in an economy with oligopolistic competition, firm heterogeneity, and innovation. Oligopolistic competition together with free entry make markups responsive to firm productivity and trade costs. Lowering trade costs reduces markups on domestic sales but increases...
Persistent link: https://www.econbiz.de/10011750054
This paper studies the incentives that developing countries have to protect intellectual properties rights (IPR). On the one hand, free-riding on rich countries technology reduces their investment cost in R&D. On the other hand, firm that violates IPR cannot legally export in a country that...
Persistent link: https://www.econbiz.de/10009764430
We study the gains from trade in a model with oligopolistic competition, heterogeneous firms and innovation, and provide a formula to decompose the mechanism. The new insight we provide is that market concentration can be a welfare-relevant feature of market power above and beyond markup...
Persistent link: https://www.econbiz.de/10012507344