We analyse a simple ‘tariffs-cum-foreign competition’ policy targeted at enhancing the competitive position of a domestic, developing country firm that competes with its developed country counterpart on the domestic market and that carries out innovative (imitative) effort. We evaluate this...

In this paper we discuss the incentives of a welfare maximizing government to implement strategic trade policy when, on the one hand, there is uncertainty about the relevant market information (like the type of competition, demand function, cost function, etc.), but, on the other hand, the...

We study a North-South trade situation in which prices are perfectly flexible and knowledge spills over from Northern to Southern firms. In a partial equilibrium setup we analyse the role of tariffs in preventing technological leakages and their impact on domestic (Northern) consumers and...

We compare the social welfare generated by a domestic government in two types of policy set-ups: a ‘commitment’ regime in which government sets its policy instrument before the strategic choice by a domestic firm and a ‘non-commitment’ regime where the policy variable is set after the...

We analyse strategic trade policy with vertical product differentiation where firms from developed and less developed countries compete in both qualities and prices in the domestic market and where the developing country firm has a lower marginal efficiency in producing quality. We concentrate...

In this Paper, we analyse the following policy dilemma: strategic trade policy versus free trade when the domestic government is bound to intervene only after the domestic firm's strategic variable is chosen. This intervention allows the domestic firm to manipulate the domestic government and...