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Competition for firms in an oligopolistic industry : the impact of economic integration

Haufler, A. and Wooton, I. (2010) Competition for firms in an oligopolistic industry : the impact of economic integration. Journal of International Economics, 80 (2). pp. 239-248. ISSN 0022-1996

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Abstract

We set up a model of generalised oligopoly where two countries of different size compete for an exogenous, but variable, number of identical firms. The model combines a desire by national governments to attract internationally mobile firms with the existence of location rents that arise even in a symmetric equilibrium where firms are dispersed. As economic integration proceeds, equilibrium taxes initially decline, but then rise again as trade costs fall even further. A range of trade costs is identified where economic integration raises the welfare of the small country, but lowers welfare in the large country.

Item type: Article
ID code: 15337
Keywords: tax competition, subsidy competition, oligopolistic markets, economic integration, Economic Theory, Finance, Economics and Econometrics
Subjects: Social Sciences > Economic Theory
Department: Strathclyde Business School > Economics
Depositing user: Mrs Kirsty Fontanella
Date Deposited: 14 Jan 2010 20:41
Last modified: 21 May 2015 11:23
URI: http://strathprints.strath.ac.uk/id/eprint/15337

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