High-Cost Domestic Joint Ventures and International Competition: Do Domestic Firms Gain? / Ruth R. Raubitschek, Barbara J. Spencer.

Format:

Book

Author/Creator:

Raubitschek, Ruth R.

Contributor:

National Bureau of Economic Research.

Spencer, Barbara J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w4804.

NBER working paper series no. w4804

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

High-Cost Domestic Joint Ventures and International Competition

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1994.

Summary:

This paper develops the idea that when markets are imperfectly competitive, final producers may gain from a joint venture that produces part of their input requirements even though marginal cost exceeds the input's market price. Production by the joint venture lowers the market price of the input and this can raise profits sufficiently from final product sales to make the joint venture 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.

Notes:

Print version record

July 1994.