Regulatory Protection When Firms Move First

Terence Edwards

Discussion Paper Series from Department of Economics, Loughborough University

Abstract: I investigate the imposition of a horizontal technical barrier to trade (HTBT) in a symmetric, cross-hauling duopoly. Tariffs and subsidies are ruled out, but, in the absence of a mutual recognition agreement, it is possible for governments to impose HTBTs, so long as firms apply different technologies. If firms are first movers, this possibility may induce them to avoid technical collaboration, in order to tempt governments into creating local monopolies, except where spillovers and R&D effects are high. This exacerbates the costs of regulatory protection, compared to standard models without R&D or spillovers.

Keywords: Research and development; spillovers; trade; protection. (search for similar items in EconPapers)
JEL-codes: F10 F19 L13 L50 (search for similar items in EconPapers)
Date: 2009-11, Revised 2009-11
New Economics Papers: this item is included in nep-ino and nep-reg
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