Sourcing product quality for foreign market entry (2019)

Type of Content
Journal ArticlePublisher
Springer Science and Business Media LLCISSN
1610-28781610-2886
Language
enCollections
Abstract
This study employs a differentiated Cournot model with both horizontal and vertical product differentiation. It scrutinizes the implications of frictions over manufacturing high quality (upstream market power) on the endogenous foreign market entry mode and product quality choice. Both high-quality exports and subsidiary sales require high-quality inputs supplied by a monopoly upstream firm, and thus are costly. Relative product quality, product substitutability, and product-specific trade costs are the key for the variation in input/output prices, sales and the markup between an exporter and a multinational, and have significant trade policy implications for high-quality exports and subsidiary sales.
Citation
Koska OA (2020). Sourcing product quality for foreign market entry. Review of World Economics.This citation is automatically generated and may be unreliable. Use as a guide only.
Keywords
Vertical Product Differentiation; Horizontal Product Differentiation; Upstream Market Power; Trade; Foreign Direct InvestmentANZSRC Fields of Research
38 - Economics::3801 - Applied economics::380107 - Financial economics35 - Commerce, management, tourism and services::3502 - Banking, finance and investment::350202 - Finance
Rights
All rights reserved unless otherwise statedRelated items
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