Parallel trade, product quality, and welfare

Matteucci, Giorgio; Reverberi, Pierfrancesco

doi:10.1016/j.econlet.2013.12.004

Cited by 18 publications

(16 citation statements)

References 9 publications

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“…This result is in sharp contrast to the finding by Matteucci and Reverberi (2014). They assume the manufacturer adopts one-part tariff pricing and conclude that PI likely raises its product innovation.…”

Section: Product Innovation With Parallel Importscontrasting

confidence: 80%

“…The above result differs from those in Li and Maskus (2006) and Matteucci and Reverberi (2014). The former assumes that the manufacturer adopts two-part tariff pricing, and shows that process innovation decreases the wholesale price while the latter assumes that the manufacturer employs one-part tariff pricing and finds that product innovation increases the wholesale price.…”

Section: Product Innovation With No Parallel Importscontrasting

confidence: 49%

“…3 The effect of PI on product innovation remains an important issue to be further addressed in the literature. Matteucci and Reverberi (2014) find that PI may stimulate the manufacturer's product innovation, depending on consumers' preferences for innovation between the two countries.…”

Section: Introductionmentioning

confidence: 98%

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Parallel imports, product innovation and market structures

Hwang

Peng

Shih

2014

International Review of Economics & Finance

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Section: Product Innovation With Parallel Importscontrasting

confidence: 80%

Section: Product Innovation With No Parallel Importscontrasting

confidence: 49%

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Parallel imports, product innovation and market structures

Hwang

Peng

Shih

2014

International Review of Economics & Finance

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“…In a North-South model, Grossman and Lai (2008) show that parallel trade promotes product innovation because it induces the Southern government to change their price control in favor of Northern firms. Matteucci and Reverberi (2014) suggest there is a case where PIs enhance a quality-enhancing R&D, when the quality a↵ects the consumers' willingness to pay di↵erently between the source and the destination countries. Hwang,…”

Section: Relationship To the Literaturementioning

confidence: 99%

Parallel imports and repair services

Ishikawa

Morita

Mukunoki

2020

Journal of Economic Behavior & Organization

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This study explores the e↵ect of parallel imports on both domestic and foreign countries when the producer may refuse to provide repair and maintenance services for parallel imported units, or charge higher prices for those services. This service discrimination makes it possible for the producer to weaken intra-brand competition and reduce the degree of price convergence between countries. If this is the case, both the positive e↵ect of parallel imports on consumers in the destination country and the negative e↵ect on the producer and consumers in the source country become weaker. If the quality of the good depends on the producer's investment, permitting parallel imports in the presence of the service discrimination could lower the quality, because lower quality leads to a larger price gap between countries. As a result, it is possible that prices increase, consumers lose, and welfare deteriorates in both countries. This negative welfare e↵ect is more likely to emerge as the

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“…In the past decade, parallel trade (PT) has become more visible and of greater relevance in global trade and drawn considerable debate in the literature (Ganslandt & Maskus, , ; Grossman & Lai, ; Hwang, Huang, & Peng, ; Hwang, Peng, & Shih, ; Kao & Peng, ; Maskus & Stähler, ; Matteucci & Reverberi, , among others).…”

Section: Introductionmentioning

confidence: 99%

Parallel trade with an endogenous market structure

2018

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This paper sets up a two‐country model in which there is one domestic manufacturer authorising its product to a distributor in the foreign country. The distributor can sell the product not only to its own market (i.e., the foreign market) but also back to the domestic market. The latter is called parallel trade (PT). The paper investigates the effects of PT on the profits of the manufacturer and social welfare if the domestic market structure is endogenously determined. It is found that PT should be encouraged rather than banned as it increases not only the profits of the manufacturer but also the welfare of both the domestic and the foreign countries.

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Parallel trade, product quality, and welfare

Cited by 18 publications

References 9 publications

Parallel imports, product innovation and market structures

Parallel imports, product innovation and market structures

Parallel imports and repair services

Parallel trade with an endogenous market structure

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