Can subsidies for MARs be procompetitive?

Kala Krishna (), Suddhasatwa Roy and Marie Thursby

Canadian Journal of Economics, 2001, vol. 34, issue 1, 212-224

Abstract: In contrast to recent literature, we show that market access requirements (MARs) can be implemented in a procompetitive manner even in the absence of threats in related markets. By focusing on subsidies that are paid only when the requirement is met, we show that a MAR can increase aggregate output relative to free trade provided that the right set of firms is targeted. In the context of a model with multiple Japanese and U.S. firms, we show that a MAR on U.S. imports is procompetitive as long as the U.S. firms are the ones targeted to receive the subsidy.

JEL-codes: F13 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Can Subsidies for MARs be Procompetitive? (2000)
Working Paper: Can Subsidies for MARs be Procompetitive (1998)
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