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We study the profitability incentives of merger and the endogenous industry structure in a strategic trade policy environment. Merger changes the strategic trade policy equlilibrium. We show that merger can be profitable and welfare enhancing here, even though it would not be profitable in a...
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firms differ in production efficiency. In particular, it examines the welfare effects of a uniform subsidy reduction from … (usually the efficient country) gains while the net importer (usually the inefficient country) loses from a uniform subsidy …
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