Cross-Border Trade and Commodity Tax Competition in Imperfectly Competitive Markets

Sung-Kyu LEE(이성규),Young-Hwan LEE(이영환) 한국무역학회 2008 무역학자 전국대회 발표논문집 Vol.2008 No.8

This paper studies price competition between two firms and tax competition between two governments by using a spatial model under the assumption of imperfect competition. With considering firms' fixed location and cross-border shopping, consumers try to take advantage of price or tax differentials and each government which maximizes the tax revenue on the basis of Leviathan model may attempt to induce cross-border shoppers into its own country by lowering its own tax rate than the competitors. This corresponds to the idea of tax competition which is the process of lowering tax rates to induce cross-border shoppers. This is a two-stage noncooperative game in which two firms compete independently in prices in the second stage and then two governments compete noncooperatively in taxes in the first stage. In this Nash noncooperative game, there exists symmetric or asymmetric Nash equilibrium which depends on cost structures. In particular, tax differential between governments implies 'asymmetric Nash equilibrium' in a noncooperative game. In our model, assuming imperfect competition and in particular, considering the case of different production costs, it is shown that tax differential stems from the difference in costs between two firms. This difference in tax rates induced by cost differential provides a major incentive not only for consumers to engage in cross-border shopping but also for governments to compete in taxes noncooperatively.

소비자의 국경통과구매행위와 상품세 조세경쟁

이성규 ( Sung Kyu Lee ) 한국재정정책학회 2010 財政政策論集 Vol.12 No.1

This paper examines tax competition between two governments by using a spatial model under the assumption of imperfect competition. With cross-border shopping, consumers try to take advantage of tax differentials and each government which maximizes the tax revenue on the basis of Leviathan model may attempt to induce cross-border shoppers into its own country by lowering its own tax rate than the competitors. This corresponds to the idea of tax competition which is the process of lowering tax rates to induce cross-border shoppers. In the Nash noncooperative game, there exists asymmetric Nash equilibrium which depends on cost structures. In our model, assuming imperfect competition and different production costs, it is shown that tax differential stems from the difference in costs between two firms. This difference in tax rates then provides a major incentive not only for consumers to engage in cross-border shopping but also for govern-ments to compete in taxes noncooperatively. Furthermore, we examine the external and strategic complement tax effects and compare revenue-maximizing tax rates with welfare-maximizing tax rates in Nash equilibrium.

Cross-Border Shopping and Commodity Tax Competition in Imperfectly Competitive Markets

이성규 한양대학교 경제연구소 2008 JOURNAL OF ECONOMIC RESEARCH Vol.13 No.2

This paper studies price competition between two firms and tax competition between two governments by using a spatial model under the assumption of imperfect competition. With cross-border shopping, consumers try to take advantage of price or tax differentials and each government which maximizes the tax revenue on the basis of Leviathan model may attempt to induce cross-border shoppers into its own country by lowering its own tax rate than the competitors. In this Nash noncooperative game, there exists symmetric or asymmetric Nash equilibrium which depends on cost structures. In particular, tax differential between governments implies `asymmetric Nash equilibrium' in a noncooperative game. In our model, assuming imperfect competition and in particular, considering the case of different production costs, it is shown that tax differential stems from the difference in costs between two firms. This difference in tax rates induced by cost differential provides a major incentive not only for consumers to engage in cross-border shopping but also for governments to compete in taxes noncooperatively.

Trade Effects of Regional Integration in Imperfect Competition: Evidence from the Greater Arab Free Trade Area (GAFTA)

Nicolas Peridy,Javad Abedini 한국국제경제학회 2014 International Economic Journal Vol.28 No.2

This article aims to provide new insights into trade effects of the Greater Arab Free Trade Area (GAFTA), using an imperfect competition framework. The model combines the new gravity model approach with supply-demand export equations in imperfect competition. In this regard, the role of scale economies, product varieties and expectations is explored. Facing the lack of international data on scale economies, we also develop a translog production system which makes it possible to obtain reliable estimates of this factor. For a more rigorous treatment of the endogeneity problem in the model, we make use of an instrumental GMM panel estimator. Results show limited effects of GAFTA on regional trade in imperfect competition, due to market segmentation and the predominance of inter-industry trade. In addition, the fitted intra-GAFTA trade values are far beyond the actual ones. This suggests that GAFTA countries could benefit from deeper regional trade integration. In this regard, the Arab Spring creates new opportunities to reinforce trade integration as a means of grasping additional trade gains in this area.

Market Power and Policy in the U.S. Dairy Industry

Daniel A. Sumner,안병일 경상대학교 농업생명과학연구원 2008 농업생명과학연구 Vol.42 No.2

This paper discusses several aspects of the linkage between U.S. dairy policies and imperfect competition in dairy industry. Some key facts about the U.S. dairy industry as well as the products, marketing channels and potential for imperfect competition in each of several dairy products markets are discussed. This paper outlines the issues and considers some specific topics in the relation between dairy policy and market power or imperfect competition. This paper It is suggesteds that market power may be found among several players in several dairy markets.

오렌지 수입시장에서의 관세 인하에 따른 후생효과 분석

최용호,윤영석,이상현 한국농촌경제연구원 2016 농촌경제 Vol.39 No.1

This paper analyzes how tariff reductions on fresh oranges by the KOR-US FTA have changed each economic player`s welfare. By reviews on the characteristics of Korea`s orange market, we first detect that a small number of US exporters have relatively much stronger market power than Korean importers, implying imperfect competition. Second, we theoretically explain and empirically examine that exporters may adjust exporting prices based on the size of tariff reduction. Finally, we employ the Equilibrium Displacement Models to estimate each economic player`s welfare and discuss the implications on the changes in the welfare under imperfect competition, compared to perfect competition. This paper provides the evidence that the tariff reduction affects the price decision of the U.S. orange exporters. The main results furthermore suggest that under imperfect competition, import price in Korean market is higher and consumer welfare is lower than under perfect competition.

불완전 노동시장 하에서의 조세경쟁

신상화 ( Sangwha Shin ),김상현 ( Sang-hyun Kim ) 한국경제학회 2022 The Korean Economic Review Vol.38 No.1

이 연구는 자본에 대한 세율을 조절하여 더 많은 자본을 유치하려는 경쟁 상황에 놓인 두 정부를 분석한다. 보다 구체적으로, 여러 선행연구들에서 가정한 완전한 노동시장 가정을 완화하여 불완전 노동시장을 모형화하고 이것이 두 국가의 조세경쟁 양상에 어떠한 영향을 주는지를 분석하였다. 분석 결과 양국의 노동시장비용이 대칭적으로 증가할 경우 자본이 세율 수준에 둔감해지는 것을 확인할 수 있었다. 무역비용이 존재하기 때문에 노동시장비용이 증가하게 될 경우 국내시장에서의 이익보다 해외시장에서의 이익이 더 크게 떨어지게 되며 그 결과 기업은 자본에 대한 세율이 아닌 생산비용에 더욱 민감해지게 되는 것이다. We develop a two-country model of tax competition in which governments attempt to attract more capital by adjusting the corporate income tax rate. We allow labor market imperfection and investigate how it relates to the intensity of tax competition. It is shown that in response to a symmetric increase in the labor market costs, capital becomes less sensitive to corporate income tax rates. When the labor market costs increase, firms’ profits drop more greatly in the foreign market than in the domestic market due to the existence of trade costs. Thus, firms become less concerned about the level of tax rates in the locational decision.

불완전정보하 과점시장에서 R&D 보조금 효과 분석

오택영,조명환 한국응용경제학회 2023 응용경제 Vol.25 No.1

본 연구는 과점 시장에서 기업들이 수량경쟁을 하기에 앞서 R&D 투자를 통해 비용을 절감할 수 있는 상황을 분석한다. 기업들이 서로의 R&D 투자를 관찰할 수 있을 때보다 이를 관찰할 수 없을 때, 기업들은 보다 소극적으로 R&D 투자를 진행하며 이로 인해 사회후생은 감소하는 것으로 나타났다. 그리 고 정보의 비대칭성이 존재하지 않을 때 정부의 R&D 보조금은 사회후생을 개 선시키지 못하지만, 정보의 비대칭성이 존재할 때 정부의 R&D 보조금은 기업 들의 R&D 투자를 촉진함으로써 소비자잉여 및 사회후생을 개선할 수 있다. 이 는 사회후생 측면에서 기업들로 하여금 R&D 투자에 대한 정보를 최대한 공개 하도록 하는 것이 바람직하며, R&D 보조금은 기업들의 R&D 투자에 대한 정 보가 공개되지 않는 상황에서 더 효과적이라는 시사점을 제시한다. We study the situation where firms can reduce their costs through R&D before participating in Cournot competition. We show that firms invest less in R&D resulting in a decrease in social welfare when they cannot observe each other’s R&D than when they can observe it. Government cannot improve social welfare through R&D subsidy when there is no information asymmetry, but can improve social welfare when information asymmetry exists. The results imply that it is desirable for firms to disclose information on R&D in terms of social welfare, and R&D subsidy is more effective when the information is not disclosed.

한국의 지역간 거래에 기초한 불완전경쟁 무역이론의 검증

박건영(Kon-Young Park) 한국관세학회 2014 관세학회지 Vol.15 No.1

In this study, I have attempted to empirically verify the imperfect competition trade theory based on Helpman(1987) and Debaere(2005) model using the data of inter - regional trade of Korea, By those data , I have expected that we can avoid the limitation to classify countries into developed and developing countries in previous studies and that we can analyze more specifically the role of economies of scale or product differentiation in the imperfect competition trade theory by allowing the industry analysis. According to the results of this study, the empirical model based on the imperfect competition trade theory can explain the trade volume between regions of Korea. In addition, judging by the result that empirical model of this study gives us a better picture of trade volume of manufacture than one of agriculture, forestry and fisheries, existing argument that imperfect competition trade model is more appropriate to explain the trade due to economies of scales or product differentiations has been proven again. These results are seem to suggest significant implication, which it may be possible to apply imperfect competition trade model to the future research on industrial distribution and concentration in Korea.

법경제학 관점에서 본 국내 경쟁정책의 지속가능성 고려 가능성

김정민 한국법경제학회 2022 법경제학연구 Vol.19 No.3

This paper’s main purpose is, to analyze the possibility of considering the sustainability from the perspective of economic efficiency. Based on this view, we can find the possibility as the following points: First, competition policy and sustainability policy can be harmonized in that they are policies to increase economic efficiency. Second, from the perspective of international cooperation in competition policy, it need to be considered the current status of foreign discussions (EU, OECD etc.). Third, for the interpretation of the MRFTA (Monopoly Regulation and Fair Trade Act), competition policy can consider the sustainability in Korea. Fourth, there is a lack of concrete enforcement measures to consider the sustainability in domestic competition policy. 본 연구는 경제적 효율성의 관점에서, 국내 경쟁정책에 지속가능성을 고려할 가능성에대해 살펴본다. 이러한 관점에서 다음과 같은 가능성을 확인할 수 있었다. 첫째, 이론적으로 경쟁정책과 지속가능성정책은 경제적 효율성을 증대하기 위한 정책이라는 점에서 조화될 수 있고, 지속가능성을 고려한 경쟁정책이 더 우월한 사회적 편익을 달성할 가능성이있다. 둘째, 경쟁정책의 국제협력 관점에서 EU·OECD에서 진행되는 논의 현황을 국내 정책에 고려할 필요가 있다. 셋째, 우리나라 공정거래법의 문언 해석상 지속가능성을 고려할여지가 있는 것으로 해석된다. 넷째, 구체적인 집행수단 부족으로 현행 법령으로 경쟁정책에 지속가능성을 고려하기는 현실적으로 어려운 측면이 있다.