We study entry policies as an alternative form of environmental policy. Given the strong political opposition to standard output subsidies and taxes, several countries have recently used entry policies to promote renewable energy technology, such as solar panels and biofuels. We study a two-stage game in which two regulators choose an entry policy (i.e., tax, subsidy or permit) to maximize domestic welfare. Observing the policy, firms decide the region in which to enter and compete as Cournot oligopolists. We find that both domestic (uncoordinated) policies and internationally coordinated policies increase welfare relative to unregulated settings. However, the welfare gains from international policy coordination are only large when the product is extremely clean. These results indicate that the welfare gains of international policy coordination may only offset the costs of negotiation in relatively clean industries.

China has become the largest importer of roundwood and lumber products in recent years. In this study, the degree of competition among major supplying countries in China's import market is measured through the inverse residual demand elasticity over 1995–2015. Time-series properties of the data are considered through the autoregressive distributed lag model. The analysis reveals that market power exists in roundwood and lumber markets for a few supplying countries. The suppliers in the lumber import market have more market power than those in the roundwood market. Individual countries with substantial market power have more fluctuations in trading volumes.

We developed a trade model under imperfect competition to analyze the market power of U.S. and Chinese apple producers in the Association of Southeast Asian Nations (ASEAN) market and their domestic markets and the elimination of ASEAN tariffs on U.S. and Chinese apples. We also formulated welfare functions for the United States, China, and ASEAN. Comparative static results are derived to analyze the effect of tariff changes on exports, domestic sales, and welfare. Based on the theoretical model, we derived an econometric specification and used the new empirical industrial organization literature to estimate the market power of U.S. and Chinese apple producers. The econometric model is simulated to quantify the effect of tariff removal on exports and domestic sales.

A residual demand model for beef exports to Japan is specified and estimated. The objective is to estimate the extent of market power. It is assumed that each exporting country faces a downward-sloping residual demand curve, which reflects the market demand minus the supplies of competitors, and that exporters maximize profit through their output decisions. The analysis is disaggregated by beef cut and form to capture the variation by beef market segments. The results indicate that the highest markup of price over marginal cost belongs to U.S. frozen ribs, the only indication of market power by U.S. exporters. Canada is found to have limited market power, whereas Australia and New Zealand enjoy some market power, including five chilled beef categories.

Because of high competition from Chinese apple juice processors, the United States imposed an antidumping duty on apple juice imports from China to protect the domestic processors. This trade policy benefited U.S. processors but negatively impacted Chinese processors as well as consumers in the United States. Because of the economic reforms, foreign direct investment, and technological spillover, Chinese apple processors have increased their productivity. Under oligopolistic competition with endogenous firm entry and exit, this article analyzes how the changes in U.S. tariff policy and Chinese productivity impact the market structure in the United States and China, as well as prices, quantities, and U.S. and Chinese welfare. Trade liberalization and an increase in Chinese productivity help U.S. consumers and Chinese processors. However, U.S. tariff removal adversely affects U.S. apple juice processors.

This article analyzes the effects of international trade policies on an imperfectly competitive domestic market, taking account of consumers, as well as upstream and downstream firms. We first study the impact of a classic import tax decrease and find that this policy harms upstream firms and may decrease domestic fiscal revenues. We then examine the effect of an increase in non-tariff barriers, which reduce the degree of substitutability between domestic and imported goods. This results in an improvement in each agent's situation, as international competition becomes less fierce. Finally, we show that market conditions may exist such that a coupled policy (import tax decrease and non-tariff barrier increase) makes all agents better off. This can explain the proliferation of domestic standards at national level in order to counterbalance the effect of lower tariffs negotiated by governments.

We build a model of trade and location with two countries which differ with respect to their level of productivity. Public spending has two possible allocations: a direct subsidy to immobile households or a wage subsidy to mobile firms. We show that firms receive a lower net of tax subsidy in the high-productivity country than in the low-productivity one. Despite this less generous policy, the former country can host a larger share of firms, so that its total spending for firms can be higher than in the low-productivity country when trade costs are low enough. The welfare analysis suggests that the second-best optimum requires an increase in the subsidy to households in both countries when the economies are weakly integrated or the productivity gap is low or the share of capital incomes redistributed outside the two economies is high.

Nous analysons une politique environnementale menée de façon unilatérale par un Pays Développé, destinée à lutter contre une pollution globale. Dans un cadre de concurrence internationale, nous étudions les conséquences d'une telle politique sur la répartition géographique des activités de production, sur les émissions globales, et sur la recherche de technologie propre de la part des firmes. Nous montrons principalement que des considérations stratégiques amènent les gouvernements à des politiques laxistes. Ce résultat de dumping écologique est robuste au type de concurrence puisque nous l'obtenons aussi bien pour une concurrence en prix que pour une concurrence en quantités.

We analyse trade in vertically differentiated goods between a rich and a poor country. In autarky two monopolists, selling a single product, operate in two countries which differ only for their per capita income. If trade opens, the firm operating in the poor country exports to the rich, giving rise to one-way trade. Cconsumers of the rich country and the firm of the poor country benefit from trade. Liberalization may hurt the consumers in the poor country if their per capita income is quite low vis à vis the one of the rich country. Trade in vertically differentiated goods brings about an overall gain if countries are quite far apart in terms of standard of living. Real wages increase in both countries as a result of trade, but relatively more in the rich country. As a remedy to the trade deficit, the rich country may set an import reducing tariff that, only under certain conditions, may benefit also the firm of the poor country and increase total welfare.

Ce papier développe un modèle de croissance endogène avec un secteur d'accroissement de la variété des biens intermédiaires qui regroupe des firmes technologiquement hétérogènes et qui sont en concurrence monopolistique. La structure du marché de l'équilibre de long terme est déterminée d'une manière endogène. Deux variables sont d'un grand intérêt pour l'analyse de la croissance : le degré d'hétérogénéité des firmes et le seuil technologique minimum d'entrée de nouvelles firmes. L'analyse montre, contrairement au cas homogène, que les profits des firmes survivantes sont positifs et que la concurrence technologique entre les firmes augmente la productivité moyenne de l'industrie et la croissance économique. On montre également que l'intégration économique entre deux pays de degrés d'hétérogénéité différents à l'autarcie bénéficie, en termes de croissance, à l'économie la moins compétitive. Paradoxalement, le processus d'intégration s'accompagne d'une réorganisation du marché commun au profit des firmes de l'industrie la plus compétitive.

One of the most usual claims in the debate on economic Integration is that trade liberalization and a fortiori free trade agreements are at the greater advantage of consumers of all countries. In this paper we show that this statement should be temperated if the countries differ considerably with respect to per capita income. If this is the case it can happen that only the consumers of the richest countries gain from the creation of a common market; while, in the poorest countries, the firms gain but the consumers are worse off. The analysis confirms some worries about the short run effects and the distributive problems induced by the economic integration of heterogeneous areas.

This paper analyses unilateral trade liberalisation in a Cournot duopoly model where the domestic and the foreign firm have different marginal costs. There are three results in the paper. Firstly, with linear demand, it is shown that the domestic country will lose as a result of unilateral free trade unless the foreign firm has a significant cost advantage. Secondly, it is shown that a sufficient condition for there to be gains from unilateral free trade is that the domestic firm is so uncompetitive that it ceases production under free trade. This result is generalised to the case of a Cournot oligopoly with non-linear demand. Thirdly, it is shown that there will always be gains from unilateral free trade with constant elasticity demand functions whatever the elasticity of demand or the relative costs of the domestic and foreign firms.

Literature about strategic trade policy (Brender, Krugman,…) has been concerned only with implicit internal strategic trade policies. We define them as policy tools targeting exclusively the behavior of national firms. In duopolistic terms, the goal is to move the reaction function of the domestic firm and to locate it in a better position than previously. The home country government must credibly commits itself to pursue a particular trade policy before firms make decisions about prices or production. On the contrary, external strategic trade policies influence the behaviour of foreign firms and force them to act in the way desired by the home government. Mixed strategies associate both actions and may lead to a collusive agreement. We show that if subsidy is an attractive policy tool for internal strategic trade policy with Cournot-Nash competition, Voluntary Export Restraints agreements are an equivalent and alternative strategic trade policy for governments having more preference for fiscal restraints than for the surplus of consumers and the general welfare. It is acceptable by foreign firms because they are less predatory than alternative measures. Retaliations by foreign countries are avoided by the agreement; VERs allow to impose a co-operative framework.

Saddlepoint approximations are derived for the conditional cumulative distribution function and density of where is the sample mean of n i.i.d. bivariate random variables and g(x, y) is a non-linear function. The relative error of order O(n–1) is retained. The results extend the important work of Skovgaard (1987), and are useful in conditional inference, especially in the case of small or moderate sample sizes. Generalizations to higher-dimensional random vectors are also discussed. Some examples are demonstrated.

If intra-industry trade liberalisation increases ”world” welfare, it is nevertheless true that one country should be better off in autarky. The crucial parameters for evaluating the convenience of liberalizing intra-industry trade are the relative dimensions of domestic and foreign market and industry. The prescription of free trade as a unilateral option is valid only if foreign competition is very strong, and only in this case consumers' gains offset producers' losses. If policy makers play a non-cooperative game in trade policies, free trade cannot be a Nash equilibrium of the game.