Tariffs and Privatization Policy in a Bilateral Trade Model with Corporate Social Responsibility

Sang-Ho Lee and Lili Xu ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper considers an international bilateral trade model with corporate social responsibility (CSR) and examines the strategic interaction between tariffs and privatization policy. We demonstrate that strategic tariff in a private market is higher than that in a mixed market, while efficient tariff in a private market is lower than that in a mixed market. We then show that privatization policy raises strategic tariff and worsens (improves) domestic welfare when the degree of CSR is low (high). Further, we investigate endogenous choice of privatization policy and demonstrate that both the countries choose nationalization policy even though privatization policy is globally optimal when the degree of CSR is high. This indicates the existence of a prisoner’s dilemma in choosing privatization policy in a bilateral trade model with higher CSR.

Keywords: Bilateral trade; Corporate social responsibility; Privatization; Tariff Policy (search for similar items in EconPapers)
JEL-codes: D43 F12 L13 L33 (search for similar items in EconPapers)
Date: 2017-10
New Economics Papers: this item is included in nep-cta and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/82042/1/MPRA_paper_82042.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:82042

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().