*SCOPUS*

*학술저널*

#
*Optimal Trade Policy in Vertically Related Markets*

Optimal Trade Policy in Vertically Related Markets

- 세종대학교 경제통합연구소
- Journal of Economic Integration
- 제13권 제2호
- : SCOPUS, KCI등재
- 1998.06
- 199 - 215 (17 pages)

We examine home country tariff and subsidy policies when a domestic firm uses an imported key input to produce its low-quality exports, and foreign firms produce high-quality exports as well as the key input. We show that the decisions of foreign vertically integrated firms on strategy regarding input supply depend on the tarif f-inclusive and quality-adjusted comparative advantage between countries. We prove that the home country`s optimal policy is to tax either its goods exports or its key input imports. We also show that without vertical integration, if and only if goods are not very quality-differentiated, the home country should subsidize either its goods exports and/or its key input imports. (JEL Classification: F12, F13)

Ⅰ. Introduction

Ⅱ. The Basic Model

Ⅲ. Optimal Import-Export Policy without Vertical Integration

Ⅳ. Optimal Import-Export Policy with Vertical Integration

Ⅴ. Conclusions