Symbiotic Production and Optimal Export Policy

Abstract

Abstract. This paper constructs a two-country trade model to examine the optimal policies on the exports of final and intermediate products under Cournot as well as Bertrand competition when firms engage in symbiotic production internationally. The paper shows that given linear demand for the final product, the optimal export policies are to tax the exports of both the final and intermediate goods under symbiotic production, no matter whether firms engage in Cournot or Bertrand competition in the final good market, which is contrary to the conventional wisdom. * Address for Correspondence: Department of Industrial Economics, Tamkang University, Tamsui, Taipei County, Taiwan 21537, ROC. Tel: 886-2-2625-1863, Fax: 886-2-2620 ccmai@gate.sinica.edu.tw. We are grateful to two anonymous referees for very useful comments and suggestions. The first author would like to thank Tamkang University for financial support.

Specific vs Ad Valorem Strategic Export Subsidies with Taxation Distortion

“…Strategic export policy is always an important issue in trade theory. Recent papers on this subject include Hwang et al (), Hwang and Mai (), Ishikawa and Komoriya (), Hwang et al () and Liang et al ().…”