Article ID Journal Published Year Pages File Type
981940 Procedia Economics and Finance 2013 6 Pages PDF
Abstract

This paper constructs a two-country, three-firm trade model with a two-stage game to explore the unilateral optimal export policy under Cournot competition, when the domestic export firm undertakes Cross-border ownership. We find that the optimal export policy is subsidy when domestic multinational does not has control of a local firm through partial ownership. However, the optimal export policy of the domestic country is to levy a tax when domestic multinational has control of a local firm. Moreover, the optimal export policy is free trade if there is no foreign ownership regulation possessed by foreign country.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics