Strategic Export Subsidies under a Budget Constraint: Ad Valorem versus Specific

Hong Hwang () and Kaz Miyagiwa ()
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Hong Hwang: National Taiwan University and ISSP, Academia Sinica, Postal: Department of Economics, University of Washington, Seattle, WA 98195-3330, U.S.A.

Journal of Economic Integration, 1997, vol. 12, 87-98

Abstract: This note shows that in the Brander-Spencer model of export subsidy, if there is no cost of financing subsidies, either a specific export subsidy or an ad val - orem export subsidy can be used to achieve the same maximum welfare level. If, however, there is a binding budget constraint, a specific subsidy dominates an ad valorem subsidy.

Keywords: Strategic; Export; Subsidies (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0040

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