Contents of the volume

2018, Volume 71 - Issue 1

ISSN: 2499-8265
RSS feed citation: At RePEc
Publication date: 01 February 2018

THE POLITICAL CONNOTATION OF INTERNATIONAL TRADE AND GLOBALISATION: A COMMON MISUNDERSTANDING

Silvio Traverso

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DOES WEAK MACROECONOMIC PERFORMANCE AFFECT VOTER TURNOUT? AN ANALYSIS ACCOUNTING FOR THE 'JOSHUA GENERATION EFFECT'

Richard Cebula, Maggie Foley, Sriparna Ghosh

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MODELING LIFE EXPECTANCY IMPROVEMENT AMONG KUWAITI POPULATION

Muhammad Al-Ramadhan

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FIRMS CONTROLLED BY OWNERS AND MANAGERIAL FIRMS: THE 'STRATEGIC' TRADE POLICY GAME REVISITED

Luciano Fanti, Domenico Buccella

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REGIME-SHIFT, MULTICOINTEGRATION AND FISCAL SUSTAINABILITY: FURTHER EVIDENCE ON POLAND (1999-2015)

Marco Tronzano

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Genoa Chamber of Commerce
Economia Internazionale / International Economics

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Corresponding author

Luciano FANTI, Department of Economics and Management, University of Pisa, Italy

Co-authors

Domenico BUCCELLA , Kozminsky University, Warsaw, Poland

Firms Controlled by Owners and Managerial Firms: The 'Strategic' Trade Policy Game Revisited

Pages

51-72

Abstract

This paper re-examines the strategic trade policy issue by considering a bargaining process over managerial contracts and different firms’ organizational structures; that is, either family ownership or atomistic shareholders whose board of directors delegate output choice to managers keep control over the firm. We show that, in contrast to the traditional results, a plethora of Nash equilibria emerges and the implementation of trade policies in both countries may be efficient (i.e. national social welfares are higher than under free trade) in the presence of a bargaining process in a sales delegation game. Such equilibria depend on the manager's bargaining power as well as the degree of product competition. The paper’s findings suggest that trade policy-makers should also take into account the ownership structure and the corresponding organizational form of the exporting firms.

JEL classification

F16, J51, L13

Keywords

Export Subsidy/Tax, Prisoner's Dilemma, Managerial Delegation, Owner-Manager Bargaining, Cournot Duopoly

Index

  1. Introduction
  2. Literature review
  3. The Model with Strategic Trade Policy
  4. The Equilibrium of the Game Played by Governments
  5. Conclusions

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