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| Author: | Spencer, B. J. Jones, R. W. |
| Title: | Vertical foreclosure and international trade policy |
| Journal: | Review of Economic Studies
1991 : JAN, VOL. 58:183, p.153-170 |
| Index terms: | INTERNATIONAL TRADE TRADE POLICY PRODUCTION COSTS SUPPLY VERTICAL INTEGRATION |
| Language: | eng |
| Abstract: | International differences in the cost of production of a key intermediate product can mean that a domestic firm is dependent on supplies from a foreign vertically integrated firm. The incentives country to supply the domestic firm are considered, when the firms compete in a Cournot or Bertrand market for the final product. The vertical supply decision is significantly affected by domestic supply conditions for the input and a domestic tariff on final product imports. Optimal policy by the exporting country may require a tax on both exports, or a subsidy on both exports. |
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