Endogenous Vertical Restraints In International Trade

39 Pages Posted: 22 Mar 2001  

Horst Raff

Christian-Albrechts-Universitaet zu Kiel; CESifo (Center for Economic Studies and Ifo Institute); Kiel Institute for the World Economy

Nicolas Schmitt

Simon Fraser University; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: April 2000

Abstract

this paper examines interbrand competition between a domestic and a foreign manufacturer who market their products through intermediaries. the contracts manufacturers offer these intermediaries are endogenous. in equilibrium contracts may specify exclusive territories (et), depending on the degree of substitutability between products and the level and degree of transparency of trade barriers. trade liberalization, through lower or more transparent barriers, may lead manufacturers to use et, thereby substituting private anti-competitive arrangements for government-imposed barriers. this substitution may decrease competition and welfare, and thus create a role for competition policy in a freer trade environment.

JEL Classification: F13, L42

Suggested Citation

Raff, Horst and Schmitt, Nicolas, Endogenous Vertical Restraints In International Trade (April 2000). CESifo Working Paper Series No. 284. Available at SSRN: https://ssrn.com/abstract=263812

Horst Raff (Contact Author)

Christian-Albrechts-Universitaet zu Kiel ( email )

Institut fur Volkswirtschaftslehre
Wilhelm-Seelig-Platz 1
Kiel, 24098
Germany
+49-431-880-1582 (Phone)
+49-431-880-3150 (Fax)

HOME PAGE: http://www.wiso.uni-kiel.de/vwlinstitute/Raff/?page=raff

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, D-24100
Germany

Nicolas Schmitt

Simon Fraser University ( email )

Department of Economics
8888 University Drive
Burnaby, BC V5A 1S6
Canada
604 291 4582 (Phone)

HOME PAGE: http://www.sfu.ca/~schmitt/

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Paper statistics

Downloads
150
Rank
160,275
Abstract Views
1,771