Purpose : This study examines the endogenous choice of a vertical strategy of exporting firms in relation to pricing policies of a common supplier in a third-country market. Research design, data, methodology : The paper adopts game theory for theoretical analysis. In the first stage, each exporting firm decides whether to choose vertical integration or vertical separation. In stage 2, the government of home country determines the tariff level. In third stage, if each exporting firm chooses the vertical separation in stage one, each exclusive supplier sets the input price with the fixed fee. Simultaneously, the common supplier sets the common input price. In stage 4, each exporting firm sets the price(i.e. Bertrand competition). It assumes that two exporting firms, located in different countries, compete in a third-country market where the common supplier is located. Results : The result shows that the endogenous choice of vertical separation or integration strategy of exporting firms changes depending on the level of product substitutability when the common supplier adopts a uniform pricing policy. However, when the common supplier implements a differential pricing policy, vertical separation emerges as the dominant strategy for exporting firms, regardless of product differentiation. Conclusions : This result suggests that the importing country can utilizes the tariff policy to eliminate the double martin distortion of the exporting firms and induce vertical integration strategy, thereby enhancing social welfare.