This paper examines the optimality of export subsidies in oligopolistic markets, when home and foreign fires have different costs and there is an opportunity cost to public funds. Subsidies are found to be optimal only for surprisingly lou values of the shadow price of government funds and, if...

If conventional instruments of strategic trade policy are unavailable, the system of foreign profit taxation and transfer price guidelines may serve as surrogate policy instruments. In this paper, I consider a model where firms from two countries compete with each other on a third market. I...