Energy imports and manufacturing exports with successive oligopolies and storage

Lutz G. Arnold and Volker Arnold

Energy Economics, 2024, vol. 133, issue C

Abstract: Many industrial countries run a “business model” that is based on oligopolistic export industries which strongly depend on energy imports. This paper uses an analytically tractable general equilibrium model of international trade with successive oligopolies and storage to analyze optimum trade and industrial policies for such countries. There can be over-investment in storage for strategic reasons. Despite double marginalization, there is a non-zero optimum level of market concentration for the domestic industry. The optimum import tariff is most likely positive. Subsidies to storage and reduced use of long term contracts usually raise domestic welfare.

Keywords: Energy imports; Successive oligopolies; Storage; Trade policy (search for similar items in EconPapers)
JEL-codes: F13 L13 Q41 Q48 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:133:y:2024:i:c:s014098832400166x

DOI: 10.1016/j.eneco.2024.107458

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