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The Concept of Strategic Trade Policy. The revolution that swept through the theory of international trade in the first half of the 1980s-the rise of the so-called new trade theory’-left many of the insights of traditional trade theory intact.
1 Φεβ 2007 · Strategic trade theory offers a way of conceptualizing and testing for strategic government interventions in imperfectly competitive international markets. This survey critically assesses...
trade, the existence of multinational corporations, and the emergence of an international technology gap. Furthermore, the literature in this area has deepened our understanding of the issues involved in trade policy analysis.1 What is strategic trade theory? Let us present the argument in a stylized
Strategic trade policy refers to trade policy that affects the outcome of strategic interactions between firms in an actual or potential international oligopoly. A main idea is that trade policies can raise domestic welfare by shifting profits from foreign to domestic firms.
Strategic trade policy was one of the early appli-cations of oligopoly theory in international eco-nomics. Formal treatment of oligopoly (and monopolistic competition) in international trade theory did not become well-established until the 1980s. Perhaps the rst formal application was by. fi.
industry trade exclusively discussed by both the Ricardian and the traditional and extended H–O models. The new trade theory focuses the analysis within the context of imperfect competition, including models involving oligopolies and monopolistic competition. There is also an acute interest in examining how internal and external
This paper provides a survey of the literature on trade theory, from the classical example of comparative advantage to the New Trade theories currently used by many advanced countries to direct industrial policy and trade.
