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Free Trade vs. Strategic Trade : A Peek into Pandora'S Box
Grossman, Gene M.; Maggi, Giovanni - 2021
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/10013222625
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Rent-Shifting Export Subsidies with an Imported Intermediate Product
Ishikawa, Jota; Spencer, Barbara J. - 2021
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/10013225571
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Strategic Trade, Competitive Industries and Agricultural Trade Disputes
Bagwell, Kyle; Staiger, Robert W. - 2021
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/10013227741
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Does Sales-Only Apportionment of Corporate Income Violate the GATT?
McLure, Charles E.; Hellerstein, Walter - 2021
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/10013210542
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Comparative Advantage and Optimal Trade Policy
Costinot, Arnaud - 2013
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/10013071911
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Export Subsidies and International Market Share Rivalry
Brander, James A.; Spencer, Barbara J. - 2021
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/10013220967
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Strategic Export Subsidies and Reciprocal Trade Agreements : The Natural Monopoly Case
Bagwell, Kyle; Staiger, Robert W. - 2021
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/10013237015
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Capital Subsidies and Countervailing Duties in Oligopolistic Industries
Spencer, Barbara J. - 2021
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/10013227056
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Do Labor Rents Justify Strategic Trade and Industrial Policy?
Dickens, William T. - 2021
Several efficiency wage theories of wage determination have the property that identical workers are more productive in high wage industries and that the promotion of employment in high wage industries can increase GDP (and some measures of welfare). I argue that while policies to favor high wage...
Persistent link: https://www.econbiz.de/10013219303
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Strategic Trade Policy When Domestic Firms Compete Against Vertically Integrated Rivals
Rodrik, Dani; Yoon, Chang-Ho - 2021
This paper models the international competition between a domestic firm and its vertically integrated foreign rival. The domestic firm has the choice of developing its own production capability for an intermediate input, or of importing it from the foreign firm at a price set by the latter. In...
Persistent link: https://www.econbiz.de/10013222922