Industry concentration and optimal discriminatory commercial policies

Ngo Long and Antoine Soubeyran

The Journal of International Trade & Economic Development, 1999, vol. 8, issue 3, 241-256

Abstract: We derive the characteristics of firm-specific strategic trade policies when industries consist of heterogenous firms, and show how the informational requirements for policy design are thereby expanded. A knowledge of the Herfindahl index of concentration of the foreign industry is required for the design of optimal protection for domestic firms. It is shown that optimal firm-specific tariffs reduce the degree of foreign concentration, thus shifting rents to domestic firms.

Keywords: Strategic trade policies; Herfindahl index; heterogeneous firms (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (7)

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DOI: 10.1080/09638199900000015

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