Import taxes, heterogeneity and licensing of foreign firms

Qi Yong, Hou Zemin

Science Research Management ›› 2016, Vol. 37 ›› Issue (5) : 132-140.

Science Research Management ›› 2016, Vol. 37 ›› Issue (5) : 132-140.

Import taxes, heterogeneity and licensing of foreign firms

  • Qi Yong, Hou Zemin
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Abstract

This paper analyzes the effect of import taxes and differentiation on the licensing modes choice and social welfare with a differentiated duopoly model in the Stackelberg competition. It shows that fixed-fee can occur if import taxes are high and the goods are very different. Royalty and two-part tariff can increase the profit of foreign enterprise and two-part tariff gain the highest profit. However, three licensing modes may decrease the social welfare under the condition of high import taxes and differentiated goods.

Key words

import taxes / licensing / Stackelberg competition / heterogeneous duopoly enterprise

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Qi Yong, Hou Zemin. Import taxes, heterogeneity and licensing of foreign firms[J]. Science Research Management. 2016, 37(5): 132-140

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