Can Subsidies for MARs be Procompetitive

Kala Krishna (), S. Roy and M. Thursby

Working Papers from Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER)

Abstract: We show that a market access requirement (MAR) can increase competition and reduces prices if a properly designed subsidy scheme is used to enforce the requirement. This is in contrast to most of the recent literature which has generally concluded that MARs are unambiguously anticompetitive. Our analysis underscores the importance of proper targeting and shows that it is sensitive to the composition of firms within an industry.

Keywords: TRADE; SUBSIDIES; PUBLIC POLICY (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Date: 1998

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Related works:
Working Paper: Can Subsidies for MARs be Procompetitive? (2000)
Journal Article: Can subsidies for MARs be procompetitive? (2001)
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Persistent link: http://EconPapers.repec.org/RePEc:fth:purkib:98-008

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