This paper analyzes the incentives for governments to impose export subsidies when firms invest in a cost saving technology before market competition. Governments first impose an export subsidy or a tax. After observing export policy, firms invest in cost reducing R&D and subsequently compete in...

We study the effect of market structure upon international trade policy when firms invest in process R&D before competing in a differentiated goods market. For a domestic monopoly, and increasing the number of foreign firms, the government either chooses a R&D (and output) subsidy, or remains...

In this paper, I investigate welfare gains associated with trade induced intra-firm adjustments of multi-product firms. To disentangle the welfare gains, I split up the R&D portfolio of a multi-product firm into three different channels: i) product innovation, ii) investments in the degree of...

The paper aims to illustrate how strategic trade policy is used by analyzing the concrete situation in the world aircraft industry, focusing on the case of the large civil aircrafts and on the regional jet aircrafts. We want to clarify which is the position of GATT / WTO regarding the strategic...

We analyze strategic trade policy for differentiated network goods oligopolies under alternative scenarios, when there is export rivalry between two countries. We show that, under price competition without managerial delegation, it is optimal to tax (subsidize) exports, if network externalities...

This paper examines the impact of political economic sensitivities of the trade regime among politically asymmetric countries. Our concerns focus on the effects of firm’s lobbying activity in each country, not only tariff setting, but also on the trade regime's decision, especially considering...

The important characteristic of international competition between developed and less developed countries is vertical product differentiation, where firms' quality choices represent strategic decisions. Unlike the previous literature, we allow for a leadership in quality choice and the...

In a strategic trade policy, it is assumed, in this paper, that a government changes disbursement or levy method so that the reaction function of home firm approaches infinitely close to that of foreign firm. In the framework of Bertrand-Nash equilibrium, Eaton and Grossman[1986] showed that...

This paper shows that environmental, labour and other standards can be effective strategic policy instruments even when they are strictly non-discriminatory. This is because standards can be set which the foreign producer optimally chooses not to meet, allowing the domestic producer to...

In the economics profession there is a fierce debate whether industrial and innovation policy should be targeted to specific sectors or firms. This paper discusses the welfare effects of such targeted policies in a third-market international trade model under imperfect competition. A theoretical...