概要:This paper studies the effect of state trading enterprises (STEs)
as a trade policy in a small importing country.
In particular, we focus on the situation wherein the government
whose payoff function is biased toward domestic producers controls
the domestic production through setting the producers' price,
whereas the STEs procure goods from domestic producers and
imports through setting the consumers' price.
To emphasize the strategic interaction between the government
and STE, we analyze the two cases; simultaneous move game
and sequential move game in which the government sets the price
in advance. In this model, it is shown that both consumers' and
producers' prices are lower under the sequential move game, and
as a result, the sequential move game is welfare-superior to
the simultaneous move game. Furthermore, the paper unlocks the
difference between the STE and optimal tariff regimes.
We show that the imports and welfare under the optimal tariff
can exceed those under the STE regime.