Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18803
Authors: 
Nese, Gjermund
Straume, Odd Rune
Year of Publication: 
2005
Series/Report no.: 
CESifo Working Paper 1439
Abstract: 
We study a policy game between exporting and importing countries in vertically linked industries. In a successive international Cournot oligopoly, we analyse incentives for using tax instruments strategically to shift rents vertically, between exporting and importing countries, and horizontally, between exporting countries. 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 and harm an importing (downstream) country. On the other hand, a more competitive downstream industry may harm exporting countries.
Subjects: 
successive oligopoly
strategic trade policy
industry concentration
JEL: 
L13
F13
F12
Document Type: 
Working Paper

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