A Note on Comparative Statics For A Labor-Managed Firm Engaged in Exporting
Journal of Comparative Economics, 2000, 28, 3, 619-625
BANIAK, Andrzej, A Note on Comparative Statics For A Labor-Managed Firm Engaged in Exporting, Journal of Comparative Economics, 2000, 28, 3, 619-625 - https://hdl.handle.net/1814/16908
Retrieved from Cadmus, EUI Research Repository
The behavior of a labor-managed firm (LMF) producing both for the domestic market and for export is analyzed assuming that it competes with a foreign profit-maximizing firm (PMF) in the export market. Conventional wisdom suggests that a LMF facing an increase of demand in the foreign market will cut sales in this market. We show that, with high enough sales in the domestic market, the LMF will sell less at home and more abroad after an introduction of an export subsidy. We also show that, under the same condition, the LMF will increase foreign sales after a devaluation of the domestic currency. Thus, the LMF reacts in a manner similar to that of a PMF.
Cadmus permanent link: https://hdl.handle.net/1814/16908
Full-text via DOI: 10.1006/jcec.2000.1665
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