Takauchi, Kazuhiro (2012): International R&D Rivalry with a Shipping Firm.
Download (190Kb) | Preview
To examine the role of shipping firms in the international research and development (R&D) rivalry, we build a two-country (exporting and importing), two-firm (exporting and local) duopoly model with a shipping firm. The exporting firm competes with the local firm in the duopoly market of the local country but must pay a shipping fee to the shipping firm in order to sell its product in the local market. Similar to market competition, exporting and local firms engage in R&D competition. We compare two timing structures of the game: in one, the R&D stage is first, and in the other, the shipping firm is the leader. We show that when the R&D stage is first, there are ranges of parameter values such that the investment level of the exporting firm decreases as R&D becomes more efficient. When the shipping firm is the leader, we show that there are ranges of parameter values such that the profit of the local firm decreases as R&D becomes more efficient. Further, it is shown that consumers in the local country prefer the regime in which the shipping firm is the leader, whereas the government of the local country prefers the other regime.
|Item Type:||MPRA Paper|
|Original Title:||International R&D Rivalry with a Shipping Firm|
|Keywords:||International trade; R&D rivalry; Shipping firm|
|Subjects:||L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets
F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies
|Depositing User:||Kazuhiro Takauchi|
|Date Deposited:||22. Feb 2012 09:40|
|Last Modified:||12. Feb 2013 05:57|
Andriamananjara, S., 2004. Trade and international transport services: An analytical framework. Journal of Economic Integration 19(3), 604-625.
Calabuig, V., Gonzalez-Maestre, M., 2002. Union structure and incentives for innovation. European Journal of Political Economy 18, 177-192.
Dewit, G., Leahy, D., 2004. Rivalry in uncertain export markets: Commitment versus flexibility. Journal of International Economics 64, 195-209.
Dewit, G., Leahy, D., 2011. Strategic investment and gains from trade. NUIM Working Papers N216-11.
Francois, J., Wooton, I., 2001. Trade in international transport services: The role of competition. Review of International Economics 9(2), 249-261.
Haaland, J., Kind, H., 2008. R&D policies, trade and process innovation. Journal of International Economics 74, 170-187.
Haucap, J., Wey, C., 2004. Unionization structure and innovation incentives. Economic Journal 114, 149-165.
Ishida, J., Matsumura, T., Matsushima, N., 2011. Market competition, R&D and firm profits in asymmetric oligopoly. Journal of Industrial Economics 59(3), 484-505.
Kujal, P., Ruiz, J., 2007. Cost effectiveness of R&D and strategic trade policy. BE Journal of Economic Analysis and Policy (Topics) 7, Article 21.
Kujal, P., Ruiz, J., 2009. International trade policy towards monopoly and oligopoly. Review of International Economics 17(3), 461-475.
Lahiri, S., Ono, Y., 1999. Optimal tariffs in the presence of middlemen. Canadian Journal of Economics 32, 55-70.
Leahy, D., Neary, J.P., 1996. International R&D rivalry and industrial strategy without government commitment. Review of International Economics 4(3), 322-338.
Leahy, D., Neary, J.P., 1999. R&D spillovers and the case for industrial policy in an open economy. Oxford Economic Papers 51, 40-59.
Lommerud, K.E., Meland, F., Sorgard, L., 2003. Unionized oligopoly, trade liberalization and location choice. Economic Journal 113, 782-800.
Long, N.V., Raff, H., Stahler, F., 2011. Innovation and trade with heterogeneous firms. Journal of International Economics 84(2), 149-159.
Manasakis, C., Petrakis, E., 2009. Union structure and firms' incentives for cooperative R&D investments. Canadian Journal of Economics 42, 665-693.
Motta, M., 2004. Competition policy: Theory and practice, Cambridge University Press, Cambridge.
Muniagurria, M.E., Singh, N., 1997. Foreign technology, spillovers, and R&D policy. International Economic Review 38, 405-430.
Qiu, L.D., Tao, Z., 1998. Policy on international R&D cooperation: Subsidy or tax?. European Economic Review 42, 1727-1750.
Spencer, B.J., Brander, J.A., 1983. International R&D rivalry and industrial strategy. Review of Economic Studies 50, 707-722.
Takauchi, K., 2011. Rules of origin and international R&D rivalry. Economics Bulletin 31(3), 2319--2332.