This paper examines ex post subsidies as a means of enforcing market share targets. Subsidies set after firms make their strategic decisions are shown to create powerful incentives for firms to raise prices. These effects are stronger when targets, and hence, subsidies, are specified on a...

This paper provides new testable predictions of heterogeneous firm (HF) models for trade. Variations in trade policy, trade preferences, and the rules of origin (ROOs) needed to obtain them are incorporated into the model and some analytical means of dealing with the resulting asymmetries are...

This paper addresses the following two questions: 1) Is the threat of punitive tariffs on Japanese auto manufacturers (who purchase auto parts in Japan) sufficient to implement the market share target in auto parts, and 2)What policy or set of policies should the U.S. adopt to achieve the target...