Tariff Policy and Exhaustion of Intellectual Property Rights in the Presence of Parallel Imports

Posted: 29 Feb 2008

See all articles by Yohanes E. Riyanto

Yohanes E. Riyanto

Nanyang Technological University (NTU) - Division of Economics

Jung Hur

affiliation not provided to SSRN

Date Written: July 2006

Abstract

This paper examines an interplay between tariff policy and parallel-import policy. From a welfare point of view, a host government would prefer allowing parallel imports to prohibiting them. However, if a tariff is not at the government's disposal, there will be no parallel imports in equilibrium because a foreign manufacturer would prefer adopting a uniform pricing policy to a discriminatory pricing policy, which will prevent parallel imports from occurring. If a tariff is at the government's disposal, it can be set optimally to induce the foreign manufacturer to impose a price discrimination policy. Such a policy will facilitate entry by a parallel importer provided that parallel imports are feasible.

JEL Classification: D43; F13; L11

Suggested Citation

Riyanto, Yohanes E. and Hur, Jung, Tariff Policy and Exhaustion of Intellectual Property Rights in the Presence of Parallel Imports (July 2006). Oxford Economic Papers, Vol. 58, Issue 3, pp. 549-568, 2006. Available at SSRN: https://ssrn.com/abstract=916873 or http://dx.doi.org/10.1093/oep/gpl013

Yohanes E. Riyanto

Nanyang Technological University (NTU) - Division of Economics ( email )

HSS 04-53, 14 Nanyang Drive
Singapore, 639798
Singapore

Jung Hur (Contact Author)

affiliation not provided to SSRN

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