We investigate government subsidy policies in which a home firm and a foreign firm choose to strategically set prices … governments under subsidy regime, Cournot competition is more efficient than Bertrand competition when the goods are substitutes … Pareto superior (inferior) with government's intervention of subsidy policy when the goods are substitutes (complements …

We investigate government subsidy policies in which a home firm and a foreign firm choose to strategically set prices … governments under subsidy regime, Cournot competition is more efficient than Bertrand competition when the goods are substitutes …

&D process. Policy competition results in a unilateral incentive of a subsidy, and the stable optimal policy is always a subsidy …. When two governments harmonize their policies, it is optimal for them to set subsidies to zero. The optimal subsidy in a …

consumers from the two countries form one market. We show that the subsidy is positive also when it fails to prevent the exit …

strategic industrial policy and show that an advertising subsidy is the optimal strategic policy irrespective of the form of …

for entry subsidization. Incentives are changed because entry produces "terms of trade" gains. The optimal entry subsidy … differences in the optimal subsidy for domestic and foreign entrants, with foreign entrants relatively less subsidized. Domestic …

, the domestic firm will enjoy profit increases that are larger than the necessary subsidy costs. The strategic aspect of … the subsidy policy lies in its function as a facilitating device for a radical change of the initial market structure …

("green") subsidy can become a potential strategic trade policy tool. When governments set the optimal policy tool considering …