Optimizing capacity investment and production planning in the presence of protective tariffs and market competition

IF 6 2区 管理学 Q1 OPERATIONS RESEARCH & MANAGEMENT SCIENCE
Bin Wei, Nengmin Wang, Zhengwen He, Harris Wu
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引用次数: 0

Abstract

Stringent tariff policies have forced multinational firms (MNFs) to evaluate the necessity of establishing new production capacities in their target markets to avoid high tariffs. We utilize a three-stage game-theoretic model to examine the capacity investment and production decisions of the MNF facing raw materials and finished goods tariffs, as well as competition from the local firm. Our findings indicate that intensified competition does not necessarily erode profitability; under certain demand scenarios, cost‑advantaged firms may achieve enhanced profits. Moreover, rather than universally deterring capacity investments, competition may stimulate higher capacity levels compared to a monopolistic setting. Furthermore, higher raw material tariffs diminish the investment motivation of the MNF and decrease its optimal capacity, while finished goods tariffs enhance investment willingness only under moderate capacity investment cost conditions. Finally, tariffs tend to depress MNF production and profitability while enhancing the output and profits of the local firm, albeit at the expense of consumer welfare. However, in certain circumstances, an increase in finished goods tariffs can inadvertently boost the expected output of the MNF while harming the profitability of the local firm.
在保护性关税和市场竞争条件下优化产能投资和生产计划
严格的关税政策迫使跨国公司(mnf)评估在其目标市场建立新的生产能力的必要性,以避免高关税。我们利用一个三阶段博弈论模型来研究跨国公司面对原材料和制成品关税以及来自当地企业的竞争时的产能投资和生产决策。我们的研究结果表明,激烈的竞争并不一定会降低盈利能力;在某些需求情景下,成本优势企业可能获得更高的利润。此外,与垄断环境相比,竞争可能会刺激更高的产能水平,而不是普遍阻止产能投资。此外,较高的原材料关税降低了跨国公司的投资动机,降低了其最优产能,而制成品关税仅在产能投资成本适中的条件下才会提高跨国公司的投资意愿。最后,关税往往会抑制跨国公司的生产和盈利能力,同时提高当地公司的产量和利润,尽管这是以牺牲消费者福利为代价的。然而,在某些情况下,成品关税的增加可能会无意中提高跨国公司的预期产出,同时损害当地公司的盈利能力。
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来源期刊
European Journal of Operational Research
European Journal of Operational Research 管理科学-运筹学与管理科学
CiteScore
11.90
自引率
9.40%
发文量
786
审稿时长
8.2 months
期刊介绍: The European Journal of Operational Research (EJOR) publishes high quality, original papers that contribute to the methodology of operational research (OR) and to the practice of decision making.
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