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Trade, Vertical Production Chain, and Competition Policy
Author(s) -
Yano Makoto,
Dei Fumio
Publication year - 2003
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00380
Subject(s) - downstream (manufacturing) , imperfect competition , upstream (networking) , competition (biology) , economics , production (economics) , consumption (sociology) , international economics , international trade , competition policy , imperfect , rest (music) , industrial organization , microeconomics , medicine , computer network , ecology , social science , operations management , linguistics , philosophy , cardiology , european union , sociology , computer science , biology
The authors build a trade model that renders tractable the process in which imperfect competition in a country's downstream sector affects the rest of the world through international trade. For this purpose, internationally traded goods are viewed as middle products in the vertical chain of production, in which middle products are produced upstream and transformed into final consumption goods downstream. Suppression of competition in a country's downstream sector may serve as a beggar‐thy‐neighbor policy, increasing that country's own utility while reducing that of its trading partner countries.