Robust rules for industrial policy in open economics
|Title:||Robust rules for industrial policy in open economics||Authors:||Leahy, Dermot; Neary, J. Peter||Permanent link:||http://hdl.handle.net/10197/1281||Date:||24-Jan-2001||Online since:||2009-07-23T13:52:55Z||Abstract:||The theory of strategic trade policy yields ambiguous recommendations for assistance to exporting firms in oligopolistic industries. However, some writers have suggested that investment subsidies are a more robust recommendation than export subsidies. We show that, though ambiguous in principle, the case for investment subsidies is reasonably robust in practice. Except when functional forms exhibit arbitrary non-linearities, it holds under both Cournot and Bertrand competition, with either cost-reducing or market-expanding investment, and with or without spillovers. Only if firms have strong asymmetries in their investment behaviour and engage in Bertrand competition is an investment tax clearly justified.||Funding Details:||The Economic and Social Research Council (ESRC)||Type of material:||Working Paper||Publisher:||University College Dublin. School of Economics||Series/Report no.:||UCD Centre for Economic Research Working Paper Series; WP00/21||Keywords:||Cost-reducing investment; Export subsidies; Market-expanding investment; R&D subsidies; Strategic industrial policy; Strategic trade policy||metadata.dc.subject.classification:||F12; L13||Subject LCSH:||Commercial policy
|Other versions:||http://www.ucd.ie/economics/research/papers/2000/WP00.21.pdf||Language:||en||Status of Item:||Not peer reviewed|
|Appears in Collections:||Economics Working Papers & Policy Papers|
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