 Organizational form and multiple exportable goods in export rivalry tradeKangsik Choi Manchester School, 2022, vol. 90, issue 5, 565-586 Abstract: Focusing on the multiple exportable goods between intrabrand and interbrand competition in the export rivalry market, we analyze foreign firms' endogenous choice of organizational form in the face of tariffs. It is shown that if the degree of intrabrand competition is sufficiently high, firms provide corporate incentives (i.e., U‐form) when goods are substitutes and divisional incentives (i.e., M‐form) when goods are complements, and vice versa. This result relating to the prisoner's dilemma situation depends on which effect between the tariff level and incentive terms dominates. In the case of a low degree of intrabrand competition, choosing the M‐form (U‐form) brings about Pareto efficiency for foreign firms' profits and social welfare in the importing country when goods are substitutes (complements). In contrast to previous studies, when comparing the case of no delegation with the M‐form or U‐form, the Pareto optimum can also be achieved for both foreign firms choosing the M‐form or U‐form endogenously and the importing country, without a prisoner's dilemma involving no delegation. Date: 2022 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:manchs:v:90:y:2022:i:5:p:565-586 Ordering information: This journal article can be ordered from Access Statistics for this article Manchester School is currently edited by Keith Blackburn More articles in Manchester School from University of Manchester Contact information at EDIRC. |
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