Who Benefits from Voluntary Export Restraints?

Jota Ishikawa

Review of International Economics, 1998, vol. 6, issue 1, 129-41

Abstract: Using a simple Cournot-oligopoly model, the paper examines the effects of voluntary export restraints (VERs) on profits, market shares, consumers' surplus, and domestic welfare when the domestic market is open to foreign direct investment (FDI) or exports from a third country. A VER may induce FDI from the VER-restricted country or exports from the third country. Under certain circumstances, the domestic firm loses from a VER. Even if the domestic firm gains, the increase in the market share of the domestic country induced by the VER could be less than that of the third country. Copyright 1998 by Blackwell Publishing Ltd.

Date: 1998
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