THE NUMBER OF FIRMS AND THE POLITICS OF STRATEGIC TRADE POLICY

Koichi Kagitani

Scottish Journal of Political Economy, 2008, vol. 55, issue 1, 107-122

Abstract: Incorporating home firms' lobbying in a country into a third market model of oligopoly, this paper studies how such lobbying affects the government's strategic export policy scheme. We pay special attention to the home firms' lobby formation and its effect on domestic welfare. The home firms can organize a lobby more easily when the number of their rival foreign firms is larger than that of them, and/or when the government is overly concerned with political contribution relative to domestic welfare. The strategic export policy under lobbying cannot improve the domestic welfare, which depends on the number of firms, the government's concern about political donation and the level of socially wasted lobbying costs.

Date: 2008
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https://doi.org/10.1111/j.1467-9485.2008.00441.x

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