Parallel Imports and Repair Services

Jota Ishikawa, Hodaka Morita () and Hiroshi Mukunoki

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: This study investigates the effect of parallel imports when the producer of a durable good may refuse to provide repair and maintenance services for parallel imported units, or charge higher prices for those services. By doing so, the producer is able to weaken intra-brand competition and reduce the degree of market integration, thereby mitigating the negative effect of parallel imports on profits. Although the lower degree of market integration increases the producer's profit, it does not always mean that the producer wants to improve the durability of the product. If the producer invests in improving the durability of the good, the service discrimination against the parallel imported units could lower the durability of the product. In this case, consumers in the importing country may suffer by permitting parallel imports, and the negative effect is amplified by trade liberalization.

Pages: 32 pages
Date: 2015-05
New Economics Papers: this item is included in nep-com and nep-int
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https://www.rieti.go.jp/jp/publications/dp/15e060.pdf (application/pdf)

Related works:
Journal Article: Parallel imports and repair services (2020)
Working Paper: Parallel Imports and Repair Services (2018)
Working Paper: Parallel Imports and Repair Services (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:15060

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