Import Tariff, Voluntary Export Tax and Oligopolistic Profits

Dong Cheon Shin
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Dong Cheon Shin: Yonsei University

Korean Economic Review, 1992, vol. 8, 15-23

Abstract: The paper examines the effects of changing the form of trade protection from an import tariff to a voluntary export tax on the home and foreign firms' profits in a simple general-equilibrium Cournot-Nash trading model with limited entries and constant returns to scale. It is shown that with identical Mill-Graham preferences a voluntary export tax provides more profits to both home and foreign firms than the same-rate import tariff if an international Cournot-Nash tariff equilibrium exists.

Date: 1992
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