[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/ier/iecrev/v37y1996i2p315-40.html
   My bibliography  Save this article

High-Cost Domestic Joint Ventures and International Competition: Do Domestic Firms Gain?

Author

Listed:
  • Spencer, Barbara J
  • Raubitschek, Ruth S
Abstract
This paper develops the idea that, when markets are imperfectly competitive, final-good producers may gain from a production joint venture (PJV) that produces part of their input requirements even though the PJV's marginal cost exceeds the input's market price. Production by the PJV lowers the market price of the input and this can raise final-good profits sufficiently to make the PJV worthwhile. Also, use of a joint venture internalizes the positive externality from a lower input price. These results are motivated by a setting in which domestic firms are dependent on foreign oligopolistic suppliers for a key input. Copyright 1996 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Spencer, Barbara J & Raubitschek, Ruth S, 1996. "High-Cost Domestic Joint Ventures and International Competition: Do Domestic Firms Gain?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 315-340, May.
    • Handle: RePEc:ier:iecrev:v:37:y:1996:i:2:p:315-40
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Calmfors, Lars, 1993. "Lessons from the macroeconomic experience of Sweden," European Journal of Political Economy, Elsevier, vol. 9(1), pages 25-72, March.
    2. Decressin, Jorg & Fatas, Antonio, 1995. "Regional labor market dynamics in Europe," European Economic Review, Elsevier, vol. 39(9), pages 1627-1655, December.
    3. Lindbeck, A., 1990. "The Swedish Experience," Papers 482, Stockholm - International Economic Studies.
    4. Charles F. Adams Jr. & Robert F. Cook & Arthur J. Maurice, 1983. "A Pooled Time-Series Analysis of the Job-Creation Impact of Public Service Employment Grants to Large Cities," Journal of Human Resources, University of Wisconsin Press, vol. 18(2), pages 283-294.
    5. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
    6. Gramlich, Edward M. & Ysander, Bengt-Christer, 1980. "Relief Work and Grant Displacement in Sweden," Working Paper Series 30, Research Institute of Industrial Economics.
    7. Per-Anders Edin & Robert Topel, 1997. "Wage Policy and Restructuring: The Swedish Labor Market since 1960," NBER Chapters, in: The Welfare State in Transition: Reforming the Swedish Model, pages 155-202, National Bureau of Economic Research, Inc.
    8. George E. Johnson & James D. Tomola, 1977. "The Fiscal Substitution Effect of Alternative Approaches to Public Service Employment Policy," Journal of Human Resources, University of Wisconsin Press, vol. 12(1), pages 3-26.
    9. repec:bla:scandj:v:93:y:1991:i:4:p:531-43 is not listed on IDEAS
    10. repec:bla:econom:v:53:y:1986:i:210(s):p:s1-22 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sun, Churen & Tian, Guoqiang, 2011. "Firms' organizational modes with productivity heterogeneity, demand uncertainty and production capacity," MPRA Paper 35667, University Library of Munich, Germany.
    2. Chen, Yongmin & Ishikawa, Jota & Yu, Zhihao, 2004. "Trade liberalization and strategic outsourcing," Journal of International Economics, Elsevier, vol. 63(2), pages 419-436, July.
    3. Ishikawa, Jota & Spencer, Barbara J., 1999. "Rent-shifting export subsidies with an imported intermediate product," Journal of International Economics, Elsevier, vol. 48(2), pages 199-232, August.
    4. Ki‐Dong Lee & Kangsik Choi & DongJoon Lee, 2020. "Endogenous vertical structure and trade policy in an import‐competing market," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(8), pages 1431-1445, December.
    5. Long, Ngo Van & Soubeyran, Antoine, 2001. "Cost Manipulation Games in Oligopoly, with Costs of Manipulating," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(2), pages 505-533, May.
    6. Morasch, Karl, 2000. "Strategic alliances: a substitute for strategic trade policy?," Journal of International Economics, Elsevier, vol. 52(1), pages 37-67, October.
    7. Furusawa, Taiji & Higashida, Keisaku & Ishikawa, Jota, 2003. "What information is needed for welfare-enhancing policies under international oligopoly?," Japan and the World Economy, Elsevier, vol. 15(1), pages 31-46, January.
    8. Rossini Gianpaolo & Vergari Cecilia, 2011. "Input Production Joint Venture," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 11(1), pages 1-50, March.
    9. Ishikawa, Jota & Lee, Ki-Dong, 1997. "Backfiring tariffs in vertically related markets," Journal of International Economics, Elsevier, vol. 42(3-4), pages 395-423, May.
    10. Spencer, Barbara J & Qiu, Larry D, 2001. "Keiretsu and Relationship-Specific Investment: A Barrier to Trade?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 871-901, November.
    11. Kalu Ojah, 2007. "Costs, valuation, and long‐term operating effects of global strategic alliances," Review of Financial Economics, John Wiley & Sons, vol. 16(1), pages 69-90.
    12. Colombo, Stefano & Scrimitore, Marcella, 2018. "Managerial delegation under capacity commitment: A tale of two sources," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 149-161.
    13. Akihiko Yanase & Yasushi Kawabata, 2008. "Strategic Import Policies in a Three Country Model with Vertically Related Industries," Economics Bulletin, AccessEcon, vol. 6(8), pages 1-7.
    14. Morasch, Karl, 2000. "Strategic alliances as Stackelberg cartels - concept and equilibrium alliance structure," International Journal of Industrial Organization, Elsevier, vol. 18(2), pages 257-282, February.
    15. Chen, Zhiqi & Ross, Thomas W., 2003. "Cooperating upstream while competing downstream: a theory of input joint ventures," International Journal of Industrial Organization, Elsevier, vol. 21(3), pages 381-397, March.
    16. repec:ebl:ecbull:v:6:y:2008:i:8:p:1-7 is not listed on IDEAS
    17. Nicolas Aguelakakis & Aleksandr Yankelevich, 2019. "Collaborate Or Consolidate: Assessing The Competitive Effects Of Production Joint Ventures," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 73-84, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anders Forslund & Alan B. Krueger, 1997. "An Evaluation of the Swedish Active Labor Market Policy: New and Received Wisdom," NBER Chapters, in: The Welfare State in Transition: Reforming the Swedish Model, pages 267-298, National Bureau of Economic Research, Inc.
    2. Fidrmuc, Jan, 2001. "Migration and adjustment to shocks in transition economies," ZEI Working Papers B 23-2001, University of Bonn, ZEI - Center for European Integration Studies.
    3. Galiani, Sebastian & Lamarche, Carlos & Porto, Alberto & Sosa-Escudero, Walter, 2005. "Persistence and regional disparities in unemployment (Argentina 1980-1997)," Regional Science and Urban Economics, Elsevier, vol. 35(4), pages 375-394, July.
    4. McCormick, Barry, 1997. "Regional unemployment and labour mobility in the UK," European Economic Review, Elsevier, vol. 41(3-5), pages 581-589, April.
    5. repec:zbw:bofrdp:1997_008 is not listed on IDEAS
    6. Fredrik Carlsen & Kåre Johansen & Knut RØed, 2006. "Wage Formation, Regional Migration and Local Labour Market Tightness," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(4), pages 423-444, August.
    7. Mathilde Maurel & Gunther Schnabl, 2012. "Keynesian and Austrian Perspectives on Crisis, Shock Adjustment, Exchange Rate Regime and (Long-Term) Growth," Open Economies Review, Springer, vol. 23(5), pages 847-868, November.
    8. Jimeno, Juan F. & Bentolila, Samuel, 1998. "Regional unemployment persistence (Spain, 1976-1994)," Labour Economics, Elsevier, vol. 5(1), pages 25-51, March.
    9. Mark D. Partridge & Dan S. Rickman & M. Rose Olfert & Ying Tan, 2015. "When Spatial Equilibrium Fails: Is Place-Based Policy Second Best?," Regional Studies, Taylor & Francis Journals, vol. 49(8), pages 1303-1325, August.
    10. Aki Kangasharju & Jaakko Pehkonen, 2001. "Employment-output link in Finland : evidence from regional data," Finnish Economic Papers, Finnish Economic Association, vol. 14(1), pages 41-50, Spring.
    11. Fabio Canova & Evi Pappa, 2006. "Does It Cost to Be Virtuous? The Macroeconomic Effects of Fiscal Constraints," NBER Chapters, in: NBER International Seminar on Macroeconomics 2004, pages 327-370, National Bureau of Economic Research, Inc.
    12. Stephen Machin & Kjell G. Salvanes & Panu Pelkonen, 2012. "Education And Mobility," Journal of the European Economic Association, European Economic Association, vol. 10(2), pages 417-450, April.
    13. G Ottaviano & Diego Puga, 1997. "Agglomeration in a global Economy: A Survey," CEP Discussion Papers dp0356, Centre for Economic Performance, LSE.
    14. Kondo, Keisuke, 2015. "Spatial persistence of Japanese unemployment rates," Japan and the World Economy, Elsevier, vol. 36(C), pages 113-122.
    15. Inmaculada Garcia-Mainar & Victor Montuenga-Gomez, 2003. "The Spanish Wage Curve: 1994-1996," Regional Studies, Taylor & Francis Journals, vol. 37(9), pages 929-945.
    16. Marelli, Enrico, 1999. "Convergence and asymmetries in the employment dynamics of the European regions," ERSA conference papers ersa99pa120, European Regional Science Association.
    17. Persyn, Damiaan & Brandsma, Andries & Kancs, d’Artis, 2014. "Modelling Migration and Regional Labour Markets: an Application of the New Economic Geography Model RHOMOLO," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 29, pages 372-407.
    18. Matteo Lanzafame, 2010. "The nature of regional unemployment in Italy," Empirical Economics, Springer, vol. 39(3), pages 877-895, December.
    19. aus dem Moore, Jan Peter & Spitz-Oener, Alexandra, 2012. "Bye bye, GI: The impact of the US military drawdown on local German labor markets," SFB 649 Discussion Papers 2012-024, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    20. Bayer Christian & Jüßen Falko, 2007. "Convergence in West German Regional Unemployment Rates," German Economic Review, De Gruyter, vol. 8(4), pages 510-535, December.
    21. David C Maré & Wai Kin Choy, 2001. "Regional Labour Market Adjustment and the Movements of People: A Review," Treasury Working Paper Series 01/08, New Zealand Treasury.

    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ier:iecrev:v:37:y:1996:i:2:p:315-40. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/deupaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.