We build a model of international subcontracting in quality-differentiated goods. Assuming no entry in an original equipment manufacturing (OEM) market, we show that the foreign outsourcer will choose an original design manufacturing (ODM) contract only if the subcontractor is good enough at...

In a successive duopoly in which all firms are private except the home upstream SOE, we show that if the SOE is less efficient than its foreign rival, the home managerial delegation policy will force the SOE to price below marginal cost; otherwise, it will resort to marginal cost pricing to...

We present a model of export rivalry in vertically related markets where a DC firm produces a high-quality good as well as a key input utilized by an LDC firm to produce a low-quality export good. The DC firm acts as a Stackelberg leader by setting the price of the input and the quantity of its...

We examine home country tariff and subsidy policies when a domestic firm uses an imported key input to produce its low-quality exports, and foreign firms produce high-quality exports as well as the key input. We show that the deci - sions of foreign vertically integrated firms on strategy...