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Export Competition between Landlocked and Coastal Countries: An Analysis of Strategic Export Policies
Author(s) -
Normizan Bakar,
Yasunori Ishii
Publication year - 2014
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12120
Subject(s) - landlocked country , rivalry , subsidy , competition (biology) , economics , cournot competition , international economics , government (linguistics) , international trade , market economy , microeconomics , ecology , linguistics , philosophy , political science , law , biology
This paper analyzes economic rivalry between two firms using an international C ournot duopoly model, where a firm from a landlocked country ( LC ) and a firm from a coastal country ( CC ) compete in a third‐country market. It is assumed that the landlocked country firm adopts a transport‐cost reducing R & D subsidized by its government, while the CC government imposes a toll fee on the LC firm. The findings show since a change in the LC 's transport‐cost reducing R & D subsidy has a positive effect on its export and a negative effect on the CC 's export, both measures have effective strategic export policies.