Skip to main content
Article thumbnail
Location of Repository

Can Indonesia benefit from log export barriers?

By May Arunanondchai


We use a simple model of sequential duopoly to examine the effect of different industrial structures on firms' output decision and profit shares in the international market for raw and processed tropical timber products. The model provides insights that can be applied to the Indonesian logging and plywood industry: shedding light on the appropriate policy responses.\ud \ud Whether optimal trade policy in each industry involves a tax or subsidy depends on the ownership structure and on the comparative profit margins from upstream and downstream exports. Log barriers may improve welfare even if the downstream sector is inefficient. When the industry is vertically separated, this is true regardless of the comparative profit margins. However, when the industry is vertically integrated (which is the case of Indonesia), this is only true when the downstream sector is more profitable at the margin

Topics: HC, DS, SD
Publisher: University of Warwick, Department of Economics
Year: 2002
OAI identifier:

Suggested articles


  1. (1997). Effects of the ban on tropicall og exports on the forestry sector of indonesia.
  2. (1985). Export subsidies and internationalmarket share rival ry. doi
  3. (1986). Long-term bilateral monopoly: The case of an exhaustible resource. doi
  4. (1985). Multimarket oligopoly: Strategic substitutes and complements. doi
  5. (1988). Public Policies and the Misuse ofForest Resources . doi
  6. (1994). The Economics ofTropical Timber Trade.
  7. (1992). Trade and protection in vertically related markets. doi
  8. (1999). Upstream-downstream specialisation by integrated firms in a partially integrated industry. Review ofIndustrial Organisation ,
  9. (1991). Vertical foreclosure and international trade policy. doi
  10. (1979). Vertical integration of successive oligopolists.
  11. (1988). Vertical integration, variable proportions and successive oligopolies. doi
  12. (1988). Vertical mergers and market foreclosure. doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.