scholarly journals OPTIMAL TRADE POLICIES UNDER PRODUCT DIFFERENTIATIONS

2020 ◽  
Vol 21 (1) ◽  
pp. 241-254 ◽  
Author(s):  
Yong-cong Yang ◽  
Pu-yan Nie
Keyword(s):  
Marginal Cost ◽  
Foreign Firm ◽  
Transportation Cost ◽  
Domestic Market ◽  
Foreign Firms ◽  
Trade Policies ◽  
Competitive Advantages ◽  
Developed Country ◽  
Duopoly Model ◽  
Optimal Tariff

This article focuses on the optimal international trade policy considered product differentiations. A duopoly model with a home firm in a developing country and a foreign firm in a developed country is established. The findings indicate that, the optimal tariff relies on the product differentiations significantly. On one hand, higher marginal cost of home firms have opposite effects on optimal tariff compared to higher marginal cost of foreign firms. On the other hand, the optimal tariff is monotonically decreasing in the amount of consumers caring about brands and increasing in the scale of consumers not caring about brands. Moreover, an increase in the marginal cost and transportation cost of imported goods triggers price rising in domestic market as the market power of home firms is consolidated. In addition, a foreign firm may withdraw from domestic market if its competitive advantages vanishes under high tariffs.

Illegitimate or Legitimate Non-Tariff Measures

2018 ◽  
Vol 16 (2) ◽  
Author(s):  
Stéphan Marette
Keyword(s):  
Domestic Market ◽  
Sunk Costs ◽  
Production Level ◽  
Foreign Firms ◽  
Consumption Level ◽  
International Standard ◽  
The World ◽  
Global Welfare ◽  
Number Of Firms

AbstractThis paper analyzes whether or not a standard reducing risks and influencing firms' entry is protectionist and can be interpreted as an illegitimate non-tariff measure (NTM). Domestic and foreign firms compete in selling products in the domestic market, in the presence of possible damages and endogenous sunk costs for reducing the risks of having these damages. A policymaker chooses a standard that is imposed on all firms, but may also impede their ability to enter the domestic market. Welfare can be improved with a legitimate NTM, particularly under relatively high levels of sunk costs and damages, justifying a reduction in the number of firms allowing a higher effort for curbing the expected damage. Protectionism related to an illegitimate NTM occurs when the standard maximizing domestic or foreign welfare is higher than the international standard, maximizing the world (or global) welfare inclusive of all profits and surpluses across countries. The characterization of protectionism is influenced by the domestic or foreign origin of firms, and by the nature of the expected damage incurred at either the production level or the consumption level. Configurations with expected damages related to consumption tend to exhibit more cases of protectionism compared to configurations with expected damages related to production.

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 Manufacturing Small And Medium Size Enterprises Offshore Outsourcing And Competitive Advantage: An Exploratory Study On Canadian Offshoring Manufacturing SMEs

2013 ◽  
Vol 29 (4) ◽  
pp. 1111 ◽  
Author(s):  
Muhammad Mohiuddin ◽  
Zhan Su
Keyword(s):  
Exploratory Study ◽  
Core Competency ◽  
Foreign Firms ◽  
Offshore Outsourcing ◽  
Medium Size ◽  
Competitive Advantages ◽  
Production Network ◽  
Body Of Knowledge ◽  
Job Opportunities ◽  
The World

This paper explores whether and how theoffshore outsourcing of the manufacturing SMEs creates competitive advantagesfor these firms. The offshore outsourcing strategy is widely criticized in thedeveloped countries for allegedly reducing job opportunities, missing scaleeconomy, diminishing innovation potentialities and creating various socialproblems. The present article with empirical data from thirteen Canadianoffshoring manufacturing SMEs attempted to address that the world-widedistributed co-production network could instead increase profit and marketshare, boost investment in R&D, raise focus on core competency and enhancecompetitivity of offshoring SMEs. This strategy enables companies to enhancetheir competitiveness by allowing them to have access to the competitiveproduction factors and new markets for their products. This paper contributesto the existing body of knowledge by showing that not only the largemultinationals but also the SMEs can achieve competitive advantages fromoffshoring part of their activities to foreign firms where those tasks can beperformed more competitively.

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

Globalization and Willingness to Support the Poor in Developing Countries: An Experiment in India

2020 ◽  
Vol 53 (10-11) ◽  
pp. 1656-1689
Author(s):  
Sera Linardi ◽  
Nita Rudra
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Text Analysis ◽  
Financial Support ◽  
Direct Investment ◽  
Foreign Firm ◽  
Foreign Firms ◽  
The Poor ◽  
Job Opportunities

Does an individual’s exposure to aspects of globalization impact their willingness to redistribute to the poor? We hypothesize that the “glitter” of foreign direct investment (FDI) in developing countries leads relatively better-off citizens to perceive that the poor now have more opportunities and are thereby less deserving of help. Findings from an experiment across three states in India reveal that subjects lower their financial support for the poor upon learning a foreign firm in a low-skilled sector is located in the vicinity. Text analysis of subjects’ responses supports the mechanism underlying our hypothesis: FDI reduces support for redistribution when subjects believe that foreign firms offer the uneducated poor higher wages and increased job opportunities.

The Impact of the Foreign Corrupt Practices Act on Competitiveness, Bribery, and Investment

2020 ◽  
Vol 22 (1) ◽  
pp. 105-126
Author(s):  
Maria Arbatskaya ◽  
Hugo M Mialon
Keyword(s):  
Host Country ◽  
Foreign Firm ◽  
Foreign Firms ◽  
Host Countries ◽  
Foreign Corrupt Practices Act ◽  
Total Investment ◽  
The Impact ◽  
The U.S

Abstract The Foreign Corrupt Practices Act (FCPA) prohibits U.S.-related firms from making bribes abroad. We analyze the FCPA’s effects in a model of competition between a U.S. and foreign firm for contracts in a host country. If the FCPA only applies to the U.S. firm, it reduces that firm’s competitiveness and either increases bribery by the foreign firm or reduces overall investment. If the FCPA also applies to foreign firms, it reduces total bribery, and in host countries with high corruption levels, it increases total investment. The model suggests that the FCPA will deter bribery and stimulate investment while not disadvantaging U.S. firms if its enforcement is aimed at firms who engaged in bribery in highly corrupt countries and whose main competitors are also subject to the FCPA.

Future trends and Italian SMEs

2020 ◽  
pp. 52-59
Author(s):  
Corinne Celant ◽  
◽  
◽  
Irina V. Pustokhina
Keyword(s):  
Industry 4.0 ◽  
Industrial Revolution ◽  
Domestic Market ◽  
Structural Level ◽  
Competitive Advantages ◽  
Foreign Markets ◽  
Doing Business ◽  
The One ◽  
High Level ◽  
The Impact

The stagnation of the domestic market has brought the majority of the small and medium-sized enterprises (SME) to their knees, leading them to reinvent their way of doing business and find new strategies in order to survive and grow when the environmental conditions are deeply changing. On the one hand, new trends create a strong disruption on a structural level among the productive fabrics, but on the other hand, they represent also an opportunity, which opens new scenarios and new possibilities for the relaunch of SMEs. Among the most important challenges for Italian SMEs is internationalization, which is the possibility for enterprises to trade their goods not only on the domestic market but also on the foreign markets trying to find new opportunities to obtain some advantages. This is a very complicated process, traumatic and challenging in term of resources, but the possibility to have a genetic patrimony and a productive value, as the ones of the “Made in Italy, gives to the products of Italian enterprises a high level of competition and strong differentiation, making this process more accessible. The growth and competitiveness of enterprises, in particular SMEs, increasingly depend on the ability to apply new knowledge, working methods, and technologies as well as on the opportunity to participate in the commercialization of research developments in order to create new products, services or processes. Therefore, companies should strive to benefit from the opportunities and competitive advantages that innovation brings. SMEs play an important role in economic growth and provide most of the new jobs in Italy. Within the framework of this paper, the insight into the SMEs internationalization process is presented. The article provides an analysis of SMEs in the process of internationalization. Besides it concentrates on the new threats and opportunities represented by the new industrial revolution - Industry 4.0. Analyzing the impact of Industry 4.0 on the internationalization of Italian SMEs, the authors explain the solutions that are being used and the ones that should be taken.

Ongoing SEC Disclosures by Foreign Firms

2020 ◽  
Author(s):  
Audra Boone ◽  
Kathryn Schumann-Foster ◽  
Joshua White
Keyword(s):  
Information Flow ◽  
Foreign Firm ◽  
Financial Disclosure ◽  
Foreign Firms ◽  
Market Response ◽  
Home Market ◽  
Reporting Requirements ◽  
Event Driven ◽  
Disclosure Obligations ◽  
Additional Monitoring

We study how home-market reporting requirements and listing choices associate with ongoing SEC disclosures by foreign firms and the investor response. The SEC defers material event and interim financial disclosure obligations to foreign firms' home market regulator or exchange. We find a growing number of foreign firms incorporate in disclosure havens and have little or no event-driven disclosure obligations. These firms furnish fewer 6-K disclosures but experience greater investor interest and market response to each filing. There is little evidence that the SEC substitutes for lower information flow with additional monitoring. Our results indicate that the SEC's one-size-fits-all approach to foreign firm disclosure has led to increasing disparity in information flow, despite the strong demand for and reaction to disclosures by firms from weaker regimes.

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