When Gray Markets Meet “Made in China”: The Impacts of Global Markets and Value-Added Tax Refund
Zhong-Zhong Jiang,
Yuanji Zang,
Jiayan Xu
Abstract:Motivated by the trend that gray market such as overseas shopping is thriving on E-commerce platforms, this paper investigates the impacts of gray market on global supply chain management. We consider a multinational firm (MNF) that outsources product manufacturing to a contract manufacturer (CM) in China and sells products in both the China market and overseas market. Owing to the price gap between the two markets, gray firm may purchase products in the low-price market and compete with the MNF in the high-pr… Show more
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