Tariff Policy and Transport Costs under Reciprocal Dumping

Jun Oshiro ()
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Jun Oshiro: Graduate School of Economics, Osaka University

No 11-17, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper analyzes tariff competition by investigating the strategic interactions among firms that are highly mobile across national boundaries. Although high transport costs yield a geographic dispersion of the industry, sufficiently low transport costs result in a core-periphery location where nobody bears tariff burdens. In any case, the world economy would be in a much better position under an international coordination scheme. An economy is only required to enforce a weak international trade agreement for improving global welfare.

Keywords: Tariff competition; Transport costs; Reciprocal dumping; Trade agreement; Factor mobility (search for similar items in EconPapers)
JEL-codes: F12 F21 R38 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2011-05
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