TY - JOUR
T1 - Marketing Cost Differentials, Economics Of Scale, And The Competitiveness of Small-Country Producers
AU - Donnenfeld, Shabtai
AU - Hirsch, Seev
PY - 1993
Y1 - 1993
N2 - The paper examines the effect of marketing cost differentials on the ability of small countries to compete with large-country producers in goods manufactured under economies of scale. It is shown that the mere presence of scale economies does not necessarily retard the performance of small-country producers unless export marketing costs exceed domestic marketing costs. When economies of scale and positive differences between export and domestic marketing costs are simultaneously present, small countries urith potentially more efficient producers may be unable to export to large countries served by less efficient local producers. Furthermore, the latter may end up exporting to the former. The policy implications is that subsidization of exports in conjunction with restrictions on domestic prices enhances national welfare.
AB - The paper examines the effect of marketing cost differentials on the ability of small countries to compete with large-country producers in goods manufactured under economies of scale. It is shown that the mere presence of scale economies does not necessarily retard the performance of small-country producers unless export marketing costs exceed domestic marketing costs. When economies of scale and positive differences between export and domestic marketing costs are simultaneously present, small countries urith potentially more efficient producers may be unable to export to large countries served by less efficient local producers. Furthermore, the latter may end up exporting to the former. The policy implications is that subsidization of exports in conjunction with restrictions on domestic prices enhances national welfare.
UR - http://www.scopus.com/inward/record.url?scp=84950435778&partnerID=8YFLogxK
U2 - 10.1080/08853909308523779
DO - 10.1080/08853909308523779
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AN - SCOPUS:84950435778
SN - 0885-3908
VL - 7
SP - 549
EP - 568
JO - International Trade Journal
JF - International Trade Journal
IS - 5
ER -