Industry concentration and strategic trade policy in successive oligopoly

Gjermund Nese () and Odd Rune Straume
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Gjermund Nese: Institute for Research in Economics and Business Administration, Postal: Breiviksveien 40, N-5045 Bergen, Norway

No 10/04, Working Papers in Economics from University of Bergen, Department of Economics

Abstract: We study a policy game between exporting and importing countries in vertically linked industries. In a successive international Cournot oligopoly, we let the governments in the importing and exporting countries use tax instruments strategically to shift rents up or down the vertical value-chain. 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 while harming 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)
JEL-codes: F12 F13 L13 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2004-11-06
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Related works:
Journal Article: Industry Concentration and Strategic Trade Policy in Successive Oligopoly (2007)
Working Paper: Industry Concentration and Strategic Trade Policy in Successive Oligopoly (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:bergec:2004_010

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