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Beat 'em or join 'em? : export subsidies versus international research joint ventures in oligopolistic markets
Neary, J. Peter; O'Sullivan, Paul
This paper compares adversarial with cooperative industrial and trade policies in a dynamic oligopoly game in which a home and foreign firm compete in R&D and output and, because of spillovers, each firm benefits from the other's R&D. When the government can commit to an export subsidy, such a policy raises welfare relative to cooperation, except when R&D is highly effective and spillovers are near-complete. Without commitment, however, subsidisation may yield welfare levels much lower than cooperation and lower even than free trade, though qualifications to the dangers from no commitment are noted. Not applicable
Keyword(s): Research and development; R&D spillovers; Cooperative agreements; Research Joint Ventures; Strategic trade policy; Export subsidies; Commitment; Dynamic consistency; Research, Industrial--Mathematical models; Commercial policy--Mathematical models; Export subsidies--Mathematical models
Publication Date:
2011
Type: Working paper
Peer-Reviewed: Unknown
Language(s): English
Institution: University College Dublin
Publisher(s): University College Dublin. School of Economics
File Format(s): other; application/pdf
First Indexed: 2012-08-25 05:18:22 Last Updated: 2018-10-11 15:11:19