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The primary predictions of strategic-trade theory are not restricted to imperfectly-competitive markets. Indeed, these … predictions emerge in a natural three-country extension of the traditional theory of trade policy in competitive markets, once the … theory is augmented to allow for politically-motivated governments, so that the sign of export policy may be converted from …
Persistent link: https://www.econbiz.de/10012470921
We investigate whether a welfare-maximizing government ought to pursue a program of" strategic trade intervention or instead commit itself to free trade when domestic firms will have an opportunity to manipulate the government's choice of the level of" intervention. Domestic firms may overinvest...
Persistent link: https://www.econbiz.de/10012472599
This paper argues that export subsidies aimed at shifting rents from foreign to domestic producers of a final good may also serve to shift rents to foreign firms supplying an intermediate good, weakening the incentive for the subsidy. By contrast, assuming Cournot competition for both the final...
Persistent link: https://www.econbiz.de/10012473404
There has been a pronounced change in the formulas states use to apportion the income of multistate corporations from one that placed equal weight on payroll, profits, and sales to one that places at least half the weight on sales, and eight base apportionment solely on sales. This paper, which...
Persistent link: https://www.econbiz.de/10012469653
Countries often perceive themselves as being in competition with each other for profitable international markets. In such a world export subsidies can appear as attractive policy tools, from a national point of view, because they improve the relative position of a domestic firm in noncooperative...
Persistent link: https://www.econbiz.de/10012477624
Why do governments seek restrictions on the use of export subsidies through reciprocal trade agreements such as GATT? With existing arguments, it is possible to understand GATT's restrictions on export subsidies as representing an inefficient victory of the interests of exporting governments...
Persistent link: https://www.econbiz.de/10012473274
Under GATT, countries are allowed to impose countervailing duties to offset foreign subsidies. However GATT rules limit the amount of duty to the amount of the subsidy. This paper examines a generalized model of imperfect competition with capital subsidies and shows the conditions under which a...
Persistent link: https://www.econbiz.de/10012476547
The theory of comparative advantage is at the core of neoclassical trade theory. Yet we know little about its …
Persistent link: https://www.econbiz.de/10012458973
Persistent link: https://www.econbiz.de/10000349256
This paper examines the strategic trade policy incentives for investment policies towards quality improvements in a vertically differentiated exporting industry. Firms first compete in qualities and then export to a third country market based on Bertrand or Cournot competition. Optimal policies...
Persistent link: https://www.econbiz.de/10012471239