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Industry Concentration and Strategic Trade Policy in Successive Oligopoly

Gjermund Nese and Odd Rune Straume

No 1439, CESifo Working Paper Series from CESifo

Abstract: We study a policy game between exporting and importing countries in vertically linked industries. In a successive international Cournot oligopoly, we analyse incentives for using tax instruments strategically to shift rents vertically, between exporting and importing countries, and horizontally, between exporting countries. We show that the equilibrium outcome depends crucially on the relative degree of competitiveness in the upstream and downstream parts of the industry. With respect to national welfare, a more competitive upstream industry may benefit an exporting (upstream) country and harm an importing (downstream) country. On the other hand, a more competitive downstream industry may harm exporting countries.

Keywords: successive oligopoly; strategic trade policy; industry concentration (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-com and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Industry Concentration and Strategic Trade Policy in Successive Oligopoly (2007) Downloads
Working Paper: Industry concentration and strategic trade policy in successive oligopoly (2004) Downloads
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