Endogenous Tariffs in the Presence of Multinationals

Title data

Larch, Mario:
Endogenous Tariffs in the Presence of Multinationals.
In: Journal of Institutional and Theoretical Economics. Vol. 164 (2008) Issue 3 . - pp. 534-567.
ISSN 0932-4569
DOI: https://doi.org/10.1628/093245608785363407

Abstract in another language

This paper analyzes the effect of the presence of multinational firms on endogenous tariff rates, using an analytically solvable two-country model with fixed terms of trade. Noncooperative tariffs are lower in the presence of market-seeking (horizontal) foreign direct investment (FDI). Such firms avoid trade and entail a loss of tariff revenues for importing countries. In the case of low-cost-seeking (vertical) FDI, the results are less clear-cut and the noncooperative tariff rate can turn out to be a subsidy. The world-welfare-maximizing policy is an import subsidy.

Further data

Item Type:	Article in a journal
Refereed:	Yes
Subject classification:	F12, F23
Institutions of the University:	Faculties > Faculty of Law, Business and Economics > Department of Economics > Lehrstuhl Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung Faculties > Faculty of Law, Business and Economics > Department of Economics > Lehrstuhl Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung > Lehrstuhl für Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung - Univ.-Prof. Dr. Mario Larch Faculties Faculties > Faculty of Law, Business and Economics Faculties > Faculty of Law, Business and Economics > Department of Economics
Result of work at the UBT:	No
DDC Subjects:	300 Social sciences > 330 Economics
Date Deposited:	14 Oct 2015 12:07
Last Modified:	14 Oct 2015 12:07
URI:	https://eref.uni-bayreuth.de/id/eprint/16587