2021, Volume 74 - Issue 1
RSS feed citation: At RePEc
Publication date: 17 February 2021
EFFECTS OF SINO FDI ON THE GROWTH OF SUB-SAHARAN AFRICARead the article
CRUDE OIL PRICE MOVEMENTS AND STOCK TRADING ACTIVITY: EVIDENCE FROM INDONESIARead the article
THE EFFECT OF WATER CONSERVATION ON RESIDENTIAL FRESH WATER CONSUMPTION: EVIDENCE FROM KUWAITRead the article
SHORT AND LONG RUN ASYMMETRIC EFFECTS OF MONETARY AND FISCAL POLICY UNCERTAINTY ON ECONOMIC ACTIVITY IN THE U.S.Read the article
FOREIGN OWNERSHIP AND OPTIMAL DISCRIMINATORY TARIFFS UNDER OLIGOPOLISTIC COMPETITIONRead the article
Chien- Hui LEE , Department of International Business, National Kaohsiung University of Science and Technology, Taiwan, R.O.C.
Jen-Yao LEE, Department of International Business, National Kaohsiung University of Science and Technology, Taiwan, R.O.C.
Leonard F.S. WANG, Wenlan School of Business, Zhongnan University of Economics and Law, Wuhan, China
In this paper, we explore the trade policy issue incorporating foreign ownership from importing country into the export competition model to see how it affects the configuration of discriminatory tariff rate. We show that 1. When the portion of exporting firm’s equities owned by domestic investors is symmetric, the optimal trade policy may be an import subsidy and the importing country will provide a higher subsidy on the exporting firm with a lower cost of production; and 2. When the portion of equities of lower marginal cost country owned by domestic investors is sufficiently high in asymmetric equilibrium, the importing country will impose a lower tariff on the exporting firm with a lower cost of production without the production efficiency improvement, while a tariff will further decrease or turn out to be a subsidy with the production efficiency improvement.
D43, F12, F13
Foreign Ownership, Discriminatory Tariffs, Oligopolistic Competition
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