Working Paper: NBER ID: w5680
Authors: Kala Krishna; John Morgan
Abstract: Why would the US threaten punitive tariffs on luxury autos to implement a market share target in auto parts? We show that by making threats to a linked market, a market share may be implemented with fairly weak informa- tional and administrative requirements. Moreover, such policies can be both pro-competitive and advatageous to US firms.
Keywords: trade policy; market share targets; auto parts dispute; US-Japan relations
JEL Codes: F13; F23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| US government's threat (H12) | compliance of Japanese firms in the auto parts sector (L62) |
| US government's threat (H12) | adherence to market share targets (L21) |