Export Competition between Landlocked and Coastal Countries: An Analysis of Strategic Export Policies

Bakar Normizan and Ishii Yasunori

Review of Development Economics, 2014, vol. 18, issue 4, 804-812

Abstract: This paper analyzes economic rivalry between two firms using an international Cournot duopoly model, where a firm from a landlocked country (LC) and a firm from a coastal country (CC) compete in a third-country market. It is assumed that the landlocked country firm adopts a transport-cost reducing R&D subsidized by its government, while the CC government imposes a toll fee on the LC firm. The findings show since a change in the LC's transport-cost reducing R&D subsidy has a positive effect on its export and a negative effect on the CC's export, both measures have effective strategic export policies.

Date: 2014
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