Welfare Comparison between Specific and Ad Valorem Export Trade Policy the Case of Multi-Domestic Firms

K.L. Glen Ueng () and Horn-In Kuo
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K.L. Glen Ueng: Department of Public Finance, National Chengchi University, Taiwan
Horn-In Kuo: Department of International Business, Ming Chuan University, Taiwan

Journal of Economics and Management, 2010, vol. 6, issue 1, 17-32

Abstract: This paper extends the results obtained by Hwang et al. (1997) and Yang (2005) to the case of multi-domestic firms. Either the domestic government's budget constraint may be binding or there exists the social cost which caused by financing the export subsidy, we find that the policy of the specific export subsidy dominates that of ad valorem export subsidy and ad valorem export tax dominates specific export tax under the case of multi-domestic firms.

Keywords: cost heterogeneity; specific export subsidy; ad valorem export subsidy; tax distortion (search for similar items in EconPapers)
JEL-codes: F12 F13 H25 (search for similar items in EconPapers)
Date: 2010
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