Backfiring with backhaul problems: Trade and Industrial Policies with Endogenous Transport Costs

Jota Ishikawa and Nori Tarui

No 201514, Working Papers from University of Hawaii at Manoa, Department of Economics

Abstract: Trade barriers due to transport costs are as large as those due to tariffs. This paper explicitly incorporates the transport sector into the framework of international oligopoly and studies the effects of trade and industrial policies. Transport firms need to commit to a shipping capacity sufficient for a round trip, with a possible imbalance of shipping volumes in two directions. Because of this “backhaul problem,” trade restrictions may backfire: domestic import restrictions may also decrease domestic exports, possibly harming domestic firms and benefiting foreign firms. In addition, trade policy in one sector may affect other independent sectors.

Keywords: Transport firm; transport cost; tariffs; subsidies; international oligopoly (search for similar items in EconPapers)
JEL-codes: F12 F13 R40 (search for similar items in EconPapers)
Date: 2015-10
New Economics Papers: this item is included in nep-int and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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http://www.economics.hawaii.edu/research/workingpapers/WP_15-14.pdf First version, 2015 (application/pdf)

Related works:
Working Paper: Backfiring with Backhaul Problems: Trade and Industrial Policies with Endogenous Transport Costs (2017)
Working Paper: Backfiring with Backhaul Problems: Trade and industrial policies with endogenous transport costs (2016)
Working Paper: Backfiring with backhaul problems: Trade and Industrial Policies with Endogenous Transport Costs (2015)
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