Cost Di®erence and Endogenous Lobbying Position in Intra-industry Trade
نویسنده
چکیده
A two-count ry, twōrm model has been developed to study equilibrium lobbying posit ions in intra-industry trade under cost uncertainty. A ̄rm chooses either a protect ionist posit ion or a free-t rader posit ion. The model predicts that taking the free-t rader (protect ionist) lobbying posit ion is an e± cient (ine± cient) ̄rm's dominant strategy. In addit ion, for any lobbying posit ion taken by a ̄rm, its lobbying e®ort always decreases as its product ion cost increases. The ̄ndings help shed light on some empirical observat ions. General ̄eld: Internat ional Trade JEL Classi ̄cation No.: F12; F13
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