International tariffs in a mixed oligopoly with research spillovers

Shoji Haruna, Rajeev K. Goel

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

This paper merges three strands of the literature - industrial organization, international trade, and economics of technical change - to examine the effect of tariffs on international mixed oligopolies which conduct research and development (R&D) that is prone to spillovers. Mixed oligopolies are prevalent in the defense sector, among other sectors. Using a two-stage sequential game with R&D in the first stage and production in the second stage, results show that higher tariffs reduce outputs of both the domestic public firm and foreign private firms, and private R&D. Effects on domestic R&D and welfare, and profits of foreign private firms depend upon spillovers. Within a large range of research spillovers, higher tariffs can in fact lower welfare. Some of these findings are different from traditional oligopolies and from models that ignore research spillovers. Policy implications are discussed.

Original languageEnglish
Pages (from-to)277-293
Number of pages17
JournalPeace Economics, Peace Science and Public Policy
Volume22
Issue number3
DOIs
Publication statusPublished - Aug 1 2016

Keywords

  • Cost reduction
  • Defense sector
  • Import tariffs
  • Mixed oligopoly
  • R&D
  • Spillovers

ASJC Scopus subject areas

  • Sociology and Political Science
  • Economics and Econometrics
  • Political Science and International Relations
  • Management, Monitoring, Policy and Law

Fingerprint

Dive into the research topics of 'International tariffs in a mixed oligopoly with research spillovers'. Together they form a unique fingerprint.

Cite this