| Popis: |
Using a vertically linked model of international trade where producers and sellers are dierent entities and belong to two dierent countries, we examine the issue of endogenous leadership. In the absence of policy intervention, there are two cases depending on whether the producer or the seller is the leader. In the presence of policy intervention, the nationality of the leader and that of the follower also becomes important. We nd necessary and sucient conditions for endogenous leadership to arise, and nd that in the presence of policy intervention and lump-sum transfers, leadership by the domestic rm | whether it is a producer or a seller | will emerge as the equilibrium. |
