the government incentive to impact on entry costs, and how entry subsidies can be used strategically in open economies. We … the monopoly pricing distortion. In the autarky equilibrium these subsidies trigger entry, but they eventually do not lead … to more but to better firms in the market. In the open economy there is another, strategic motive for entry subsidies as …

countries. These costs are heavily influenced by economic policy through entry regulation and subsidies. In this paper we … another, strategic motive for entry subsidies as the tightening of market selection leads to a competitive advantage for … domestic producers in international trade. Our analysis shows that entry subsidies in the Nash-equilibrium are first increasing …