Why parallel trade may raise producers' profits

• 成果类型: Article
• 署名作者: Raff, Horst; Schmitt, Nicolas
• 署名单位: University of Kiel; Simon Fraser University; University of Geneva
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2006.08.001
• 发表日期: 2007
• 页码: 434-447
• 关键词: parallel trade; distribution

摘要

This paper shows that a manufacturer may benefit from parallel trade. In addition to an intuitive condition about the effect of demand shocks, this occurs when competitive retailers must order inventories before they know the realization of demand and for products whose sale value drops at the end of the demand period. For these types of products, letting retailers trade unsold inventories generally results in larger orders placed with the manufacturer and higher manufacturer profit. The model provides a simple explanation as to why the volume of parallel trade is now very large and accepted by manufacturers for some products such as automobiles, clothes, toys, consumer electronics, musical recordings, cosmetics and perfumes. (C) 2006 Elsevier B.V. All rights reserved.