Extension of Long-Staehler’s Model on Optimal Export Tax in the Case of Privatization

DOI: 10.4236/me.2015.65053   PDF   HTML   XML   2,438 Downloads   2,782 Views  

Abstract

This paper extends Long and Staehler’s model and studies optimal export tax in the case of privatization. The authors find that optimal export tax increases with the degree of privatization if product differentiation exists. The authors provide a counterexample to Long and Staehler’s model and reach a different conclusion. This finding emphasizes that the relationship between the variables of optimal export tax and conditions of asymmetric cost and product differentiation is quite different from Long and Staehler’s model. Since optimal export tax is endogenous in the model, the authors also consider the potential endogeneity of privatization decision, which is an important issue in a traditional mixed duopoly analysis.

Share and Cite:

Wu, T. and Lin, J. (2015) Extension of Long-Staehler’s Model on Optimal Export Tax in the Case of Privatization. Modern Economy, 6, 544-551. doi: 10.4236/me.2015.65053.

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1] Pal, D. and White, M.D. (1998) Mixed Oligopoly, Privatization, and Strategic Trade Policy. Southern Economics Journal, 65, 264-281. http://dx.doi.org/10.2307/1060667
[2] Pal, D. and White, M.D. (2003) Intra-Industry Trade and Strategic Trade Policy in the Presence of Public Firms. International Economic Journal, 17, 29-41.
http://dx.doi.org/10.1080/10168730300080025
[3] Chang, W.W. (2005) Optimal Trade and Privatization Policies in an International Duopoly with Cost Asymmetry. Journal of International Trade and Economic Development, 14, 19-42. http://dx.doi.org/10.1080/0963819042000333234
[4] Chao, C. and Yu, E.S.H. (2006) Partial Privatization, Foreign competition, and Optimum Tariff. Review of International Economics, 14, 87-92. http://dx.doi.org/10.1111/j.1467-9396.2006.00562.x
[5] Wang, L.F.S., Wang, Y.C. and Zhao, L. (2009) Privatization and Efficiency Gain in an International Mixed Oligopoly with Asymmetric Costs. Japanese Economic Review, 60, 539-559. http://dx.doi.org/10.1111/j.1468-5876.2009.00477.x
[6] Eaton, J. and Grossman, G.M. (1986) Optimal Trade and Industrial Policy under Oligopoly. Quarterly Journal of Economics, 101, 383-406. http://dx.doi.org/10.2307/1891121
[7] Lee, H. and Roland-Holst, D. (1997) The Environment and Welfare Implications of Trade and Tax Policy. Journal of Development Economics, 52, 65-82. http://dx.doi.org/10.1016/S0304-3878(96)00439-7
[8] Mitra, D. (1999) Endogenous Lobby Formation and Endogenous Protection: A Long-Run Model of Trade Policy Determination. American Economic Review, 89, 1116-1134. http://dx.doi.org/10.1257/aer.89.5.1116
[9] Long, N. and Staehler, F. (2008) How does State Ownership Affect Optimal Export Taxes? Economics Bulletin, 37, 1-7.
[10] Kamijo, Y. and Nakamura, Y. (2009) Stable Market Structures from Merger Activities in Mixed Oligopoly with Asymmetric Costs. Journal of Economics, 98, 1-24. http://dx.doi.org/10.1007/s00712-009-0074-y
[11] Wang, L.F.S. and Chen, T.L. (2010) Do Cost Efficiency Gap and Foreign Competitors Matter Concerning Optimal Privatization Policy at the Free Entry Market? Journal of Economics, 100, 33-49. http://dx.doi.org/10.1007/s00712-010-0117-4
[12] Wang, L.F.S., Wang, Y.C. and Chen, T.L. (2007) Trade Liberalization and Environmental Tax in Differentiated Oligopoly with Consumption Externalities. Economics Bulletin, 17, 1-9.
[13] Saha, B. (2009) Mixed Ownership in a Mixed Duopoly with Differentiated Products. Journal of Economics, 98, 25-43. http://dx.doi.org/10.1007/s00712-009-0075-x
[14] Matsumura, T., Matsushima, N. and Ishibashi, I. (2009) Privatization and Entries of Foreign Enterprises in a Differentiated Industry. Journal of Economics, 98, 203-219. http://dx.doi.org/10.1007/s00712-009-0091-x
[15] Vives, X. (1984) Duopoly Information Equilibrium: Cournot and Bertrand. Journal of Economic Theory, 34, 71-94. http://dx.doi.org/10.1016/0022-0531(84)90162-5

  
comments powered by Disqus

Copyright © 2020 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.