scholarly journals Strategic Trade Policy in the Presence of International Outsourcing in a Duopoly Model

KINERJA ◽  
2017 ◽  
Vol 21 (2) ◽  
pp. 214
Author(s):  
Damiana Simanjuntak ◽  
Doriani Lingga
Keyword(s):  
Trade Policy ◽  
Foreign Firm ◽  
Point Of View ◽  
Domestic Firm ◽  
Maximization Problem ◽  
Input Price ◽  
Export Policy ◽  
Social Welfare Maximization ◽  
Export Tax ◽  
Duopoly Model

This paper analyzes how domestic government sets its optimal export policy in a duopoly model when its domestic firm can only outsource its input while the rival firm is able to both produce and outsource its input. First we analyze the strategic outsourcing behavior of the foreign firm. We find that the foreign firm’s decisions on whether to outsource input or to make it by itself depend on the trade policy taken by the domestic government.  The foreign firm will strategically outsource the entire quantity of its input production to the supplier with an input price higher than its in-house cost, if the domestic firm is subsidized by the domestic government. However, when the domestic firm is being charged a positive export tax by the domestic government, the foreign firm will decide to make input by itself despite the lower input price under the outsourcing regime. From the domestic government’s point of view, we find that the conditions for the foreign firm’s decisions correspond to the domestic social welfare maximization problem. When the foreign firm chooses to outsource its input to the supplier, the domestic government will impose a negative export tax on its firm, namely subsidy. While when the foreign firm chooses to make input by itself, the domestic government will impose an export tax on its firm as trade policy.Keywords: Trade Policy, Export Tax, Subsidy, Outsourcing

scholarly journals Strategic trade policy with interlocking cross-ownership

2021 ◽  
Author(s):  
Luciano Fanti ◽  
Domenico Buccella
Keyword(s):  
Trade Policy ◽  
Free Trade ◽  
Strategic Trade Policy ◽  
Cournot Duopoly ◽  
Public Intervention ◽  
Tax Subsidy ◽  
Strategic Trade ◽  
Duopoly Model ◽  
Product Competition ◽  
Cross Ownership

AbstractBy analysing interlocking cross-ownership, this work reconsiders the inefficiency of activist governments that set subsidies for their exporters (Brander and Spencer, J Int Econ 18:83–100). Making use of a third-market Cournot duopoly model, we show that the implementation of strategic trade policy in the form of a tax (subsidy) when goods are differentiated (complements) is Pareto-superior to free trade within precise ranges of firms’ cross-ownership, richly depending on the degree of product competition. These results challenge the conventional ones in which public intervention (1) is always the provision of a subsidy and (2) always leads to a Pareto-inferior (resp. Pareto-superior) equilibrium when products are substitutes (resp. complements).

Assessment of the positions of the exporting countries of agri-food products on the world market according to their role in global value chains

2021 ◽  
pp. 8-14
Author(s):  
Elena Yu. Frolova ◽  
Keyword(s):  
Raw Materials ◽  
Action Plan ◽  
Value Added ◽  
Global Value Chains ◽  
World Market ◽  
Point Of View ◽  
Value Chains ◽  
Agricultural Exports ◽  
Export Policy ◽  
The World

The place in the rankings of agricultural exporting countries in world trade is estimated in terms of the volume of imports and exports of raw materials and food. However, to assess the efficiency of agricultural exports, it is important to analyze the value added of exported goods produced in the country. The position of the exporting country in global value chains is derived from the type of agricultural production, which in turn depends on the level of development of the national economy, the availability and breadth of use of modern high technologies. The article examines the concept of the development of world agriculture from the point of view of the formation of global value chains, set out in the report of the UN World Food Organization [1] in comparison with the political decisions of such countries as India and the People’s Republic of China in the development of agricultural and food exports. The paper analyzes the risks associated with the consolidation of developing countries as suppliers of agricultural raw materials, as well as the conditions and action plan that allow the country-exporter of agricultural raw materials to move to higher levels in the global value chains on the world market. This experience should be considered to make comprehensive and effective decisions on the formation of the export policy of agricultural products and food of the Russian Federation, considering the food security of the country.

scholarly journals Micro to Macro: Optimal Trade Policy With Firm Heterogeneity

Econometrica ◽  
2020 ◽  
Vol 88 (6) ◽  
pp. 2739-2776
Author(s):  
Arnaud Costinot ◽  
Andrés Rodríguez-Clare ◽  
Iván Werning
Keyword(s):  
Trade Policy ◽  
Small Firms ◽  
Firm Heterogeneity ◽  
Heterogeneous Firms ◽  
Point Of View ◽  
Foreign Firms ◽  
Empirical Observation ◽  
Self Selection ◽  
Export Subsidies ◽  
Selection Of

The empirical observation that “large firms tend to export, whereas small firms do not” has transformed the way economists think about the determinants of international trade. Yet, it has had surprisingly little impact on how economists think about trade policy. Under very general conditions, we show that from the point of view of a country that unilaterally imposes trade taxes to maximize domestic welfare, the self‐selection of heterogeneous firms into exports calls for import subsidies on the least profitable foreign firms. In contrast, our analysis does not provide any rationale for export subsidies or taxes on the least profitable domestic firms.

Sleeping Process Patents and Environmental Innovation / Umweltpolitik und schlafende Patente

2002 ◽  
Vol 222 (6) ◽  
Author(s):  
Marion Hübner
Keyword(s):  
Environmental Policy ◽  
Technological Progress ◽  
Foreign Firm ◽  
Closed Economy ◽  
Environmental Innovation ◽  
Duopoly Model ◽  
Patent Race

SummaryUsing a duopoly model of a patent race, it is shown that a stricter environmental policy might increase the probability of a sleeping patent instead of encouraging environmental technological progress. Two scenarios are discussed. The first concerns the regulation of a firm that competes with a foreign firm. The second concerns the regulation of a duopoly in a closed economy.

scholarly journals Dampak Kebijakan Perdagangan terhadap Pengembangan Industri Biodiesel Indonesia

2018 ◽  
Vol 36 (1) ◽  
pp. 1
Author(s):  
Helena Juliani Purba ◽  
Bonar Marulitua Sinaga ◽  
Tanti Novianti ◽  
Reni Kustiari
Keyword(s):  
European Union ◽  
Trade Policy ◽  
Least Squares ◽  
Foreign Exchange ◽  
Palm Oil ◽  
The European Union ◽  
Indonesian Government ◽  
Export Tax ◽  
Negative Impacts ◽  
Biodiesel Industry

<strong>English</strong><br />Indonesian government has been promoting development of palm oil based biodiesel industry through the so-called biodiesel mandatory policy. Biodiesel is a renewable energy and low emission. Palm oil and its derivative products are the most important contributors of foreign exchange in 2017. Trade policy is required to accelerate the achievement of biodiesel industry development in Indonesia. The study is intended to analyze the impacts of trade policy (export tax by Indonesian government and import restriction by the European Union) on the development of Indonesia’s biodiesel industry. The analysis used econometrics model in the form of simultaneous equations system consisting of 27 structural and 9 identity equations, estimated using the 2SLS (Two Stage Least Squares) method. This research used annual time series data 1991–2015. The result shows that both the export tax policy by Indonesian government and palm oil import ban by European Union have positive impacts on Indonesia's biodiesel industry but do have negative impacts on the foreign exchange revenues. The negative impacts on foreign exchange revenues can be avoided by replanting policy. Whenever the European Union imposes palm oil import ban policy; then, it is suggested that Indonesian government imposes the domestic market obligation and replanting policy. <br /><br /><br /><strong>Indonesian</strong><br />Indonesia sedang melakukan upaya pengembangan biodiesel yang bersumber dari minyak sawit dalam kebijakan mandatori biodiesel. Biodiesel adalah sumber energi terbarukan dan rendah emisi. Minyak sawit dan produk turunannya adalah penyumbang devisa negara terbesar pada tahun 2017. Kebijakan perdagangan diperlukan untuk mempercepat pencapaian pengembangan industri biodiesel Indonesia. Penelitian ini bertujuan untuk menganalisis dampak kebijakan perdagangan (pajak ekspor oleh pemerintah Indonesia dan pembatasan impor oleh Uni Eropa) terhadap pengembangan industri biodiesel Indonesia. Analisis menggunakan model ekonometrik dalam bentuk sistem persamaan simultan terdiri dari 27 persamaan struktural dan 9 persamaan identitas yang diestimasi dengan metode Two Stage Least Squares (2SLS) menggunakan data series tahunan 1990–2015. Hasil penelitian memperlihatkan bahwa kebijakan pajak ekspor oleh pemerintah Indonesia maupun larangan impor oleh Uni Eropa berdampak positif bagi perkembangan industri biodiesel Indonesia, namun berdampak negatif terhadap penerimaan devisa Indonesia. Dampak negatif terhadap penerimaan devisa dapat diatasi dengan kebijakan peremajaan kelapa sawit (replanting). Manakala Uni Eropa melakukan pelarangan impor minyak sawit, maka disarankan Pemerintah Indonesia menerapkan kebijakan domestic market obligation dan replanting.

scholarly journals Cost Effectiveness of R&D and Strategic Trade Policy

2007 ◽  
Vol 7 (1) ◽  
Author(s):  
Praveen Kujal ◽  
Juan M. Ruiz
Keyword(s):  
Cost Effectiveness ◽  
Trade Policy ◽  
Cost Effective ◽  
Export Subsidy ◽  
Sunk Costs ◽  
Marginal Costs ◽  
Export Policy ◽  
Strategic Trade ◽  
Export Subsidies ◽  
The Cost

Abstract We analyze how the cost-effectiveness of R&D influences the incentives for governments to impose export subsidies. Governments first impose an export subsidy, or a tax. After observing export policy, firms invest in cost reducing R&D and subsequently compete in the market. Governments subsidize exports under Cournot competition. Under Bertrand competition and for linear demands and constant marginal costs, export subsidies are positive whenever R&D is sufficiently cost-effective at reducing marginal costs, and negative otherwise. The trade policy reversal found in models without endogenous sunk costs disappears if R&D is sufficiently cost-effective. Thus, output subsidies seem more robust than implied by the recent literature.

scholarly journals Simulated Annealing Hyper-Heuristic for a Shelf Space Allocation on Symmetrical Planograms Problem

Symmetry ◽  
2021 ◽  
Vol 13 (7) ◽  
pp. 1182
Author(s):  
Kateryna Czerniachowska ◽  
Marcin Hernes
Keyword(s):  
Simulated Annealing ◽  
Simulated Annealing Algorithm ◽  
Profit Maximization ◽  
Point Of View ◽  
Maximization Problem ◽  
Shelf Space ◽  
Allocation Model ◽  
Space Allocation ◽  
Effective Decision Making ◽  
Shelf Space Allocation

The allocation of products on shelves is an important issue from the point of view of effective decision making by retailers. In this paper, we investigate a practical shelf space allocation model which takes into account the number of facings, capping, and nesting of a product. We divide the shelf into the segments of variable size in which the products of the specific types could be placed. The interconnections between products are modelled with the help of categorizing the products into specific types as well as grouping some of them into clusters. This results in four groups of constraints—shelf constraints, shelf type constraints, product constraints, position allocation constraints—that are used in the model for aesthetic symmetry of a planogram. We propose a simulated annealing algorithm with improvement and reallocation procedures to solve the planogram profit maximization problem. Experiments are based on artificial data sets that have been generated according to real-world conditions. The efficiency of the designed algorithm has been estimated using the CPLEX solver. The computational tests demonstrate that the proposed algorithm gives valuable results in an acceptable time.

scholarly journals A research on EU trade policy system

2017 ◽  
Vol 8 (2) ◽  
pp. 91-96
Author(s):  
Sitong Qi
Keyword(s):  
Trade Policy ◽  
The United States ◽  
Point Of View ◽  
Trade In Services ◽  
Policy System ◽  
Goods And Services ◽  
Intellectual Property Policy ◽  
The World ◽  
Important Position ◽  
The Eu

AbstractThe EU is the world’s largest trade group, occupying an important position in the world trade in goods and services, especially in the field of service trade. The EU trade in services exports and imports are higher than the United States and Japan, and the EU is the world’s largest capital output and input group, and the world’s largest foreign aid providers. With the deepening of the European integration process, Europe’s position in the world economy and trade is on the rise. Therefore, the EU’s trade policy has increasingly become the focus of attention. From the vertical point of view, research directions can be divided into trade in goods policy, trade in services policy, international direct investment policy, trade-related intellectual property policy four field. In this paper, the four vertical areas are illustrated as the focus of the study.

scholarly journals Retailer's optimal pricing and replenishment policy for new product and optimal take-back quantity of used product

2018 ◽  
Vol 28 (3) ◽  
pp. 345-353 ◽  
Author(s):  
Nita Shah ◽  
Chetansinh Vaghela
Keyword(s):  
Profit Maximization ◽  
New Product ◽  
Critical Issue ◽  
Point Of View ◽  
Maximization Problem ◽  
Selling Price ◽  
Take Back ◽  
Replenishment Policy ◽  
Total Profit ◽  
Optimal Ordering

In the world of limited resources, recovery of used products for reselling or recycling is a critical issue from the economic and environmental point of view. In this paper, we have assumed that a retailer sells the new product to customers as well as collects and sells the used products. We adopt a price dependent quadratic demand function, and the return of used product as a price and time-dependent linear function. The proposed problem is formulated as a profit maximization problem for the retailer. The objective is to find the optimal selling price, the optimal ordering quantity for the new product, and the optimal quantity of used product simultaneously such that the retailers total profit is maximized. The model is validated by a numerical example and sensitivity analysis is performed for the key parameters.

scholarly journals THE POLITICAL-ECONOMY MANAGEMENT: INDONESIA'S NEEDS FOR THE COVID-19 PANDEMIC

2021 ◽  
Vol 16 (1) ◽  
pp. 19-27
Author(s):  
Jiuhardi Jiuhardi ◽  
Dio Caisar Darma ◽  
Ariesta Heksarini
Keyword(s):  
International Trade ◽  
Free Market ◽  
Supply And Demand ◽  
Point Of View ◽  
Export Policy ◽  
Production Factors ◽  
Supply And Demand Shocks ◽  
Depth Study ◽  
Commodity Demand ◽  
Almost All

The Covid-19 outbreak continues to spread rapidly to almost all countries in the world. The authors need to highlight how the policy perspectives are taken by Indonesia at the national scale and international relations to improve the economic and political situation during this pandemic. Referring to this phenomenon, this research provides an in-depth study of the literature review on strategic efforts and steps to address commodity demand in Indonesia. In short, from an economic and political point of view, the dual problems on the supply and demand side make the premise of comparative advantage (which is the foundation of a free-market economy and international trade) into doubt about its validity. The classical premise argues that social welfare will be optimal if the state specializes in producing goods which are. Having the lowest opportunity cost according to the availability of production factors and buying other needs in the international market, it seems only valid if the international trade mechanism is not disrupted. Conversely, in conditions of supply and demand shocks, all countries will try to produce all their needs domestically and limit exporting products abroad as much as possible. Key words: national trade, global markets, export policy, import policy, Covid-19

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