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- Title
Tariff simplification, privatization, and welfare superiority.
- Authors
Yang, Ya‐Po; Zhang, Qidi; Wang, Leonard F. S.
- Abstract
In importing trade model, Cournot competition occurs between domestic semi‐public and foreign firms in domestic market; the government implements specific/ad valorem tariff. We examine the welfare effect of tariff simplification. Under general demand function, when semi‐public firms are more efficient than foreign firms with low/high privatization, tariff simplification hurts/benefits the domestic country. When semi‐public firms are less efficient than foreign firms with medium privatization, tariff simplification hurts the domestic country; else, it benefits the domestic country. When the government adopts optimal tariff rate and optimal privatization, and domestic semi‐public firms are less efficient than foreign firms, optimal privatization increases after tariff simplification.
- Subjects
TARIFF; PRIVATIZATION; DEMAND function; DOMESTIC markets
- Publication
Metroeconomica, 2022, Vol 73, Issue 2, p683
- ISSN
0026-1386
- Publication type
Article
- DOI
10.1111/meca.12378