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Partial Ownership Arrangements and Collusion in the Automobile Industry [Note 1. I would like to thank Professors Hiroshi Ono, Kazuo ...]
Author(s) -
Alley Wilson A.
Publication year - 1997
Publication title -
the journal of industrial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.93
H-Index - 77
eISSN - 1467-6451
pISSN - 0022-1821
DOI - 10.1111/1467-6451.00043
Subject(s) - collusion , automotive industry , industrial organization , business , foreign ownership , commerce , economics , engineering , foreign direct investment , macroeconomics , aerospace engineering
This paper develops a conjectural variation model that allows for partial ownership arrangements and foreign trade. This model is applied to the Japanese and US automobile industries. Although collusion is found to occur in the Japanese automobile industry, it is found to be more competitive than the US automobile industry. The effect imports have on firms' price–cost margins in both countries is also found to be different.