Subsidizing National Champions: An Evolutionary Perspective

Cécile Aubert, Oliver Falck and Stephan Heblich

No 2380, CESifo Working Paper Series from CESifo

Abstract: A national-champions-related industrial policy has become (again) en vogue among European politicians. Against this background, our work orders different types of national champions along the industry lifecycle. Different types of locally bound externalities appear along the lifecycle. In a simple model, we show that it may be efficient to subsidize innovative firms in their early stages or to protect mature firms from competition to appropriate these externalities. However, non-benevolent politicians may not choose efficient policies. Real-world examples indicate that politicians tend to concentrate on externalities at the mature stage of the lifecycle. These externalities may be transitory or at the expense of foreign country consumers.

Keywords: national champions; industrial policy; industry lifecycle; externalities (search for similar items in EconPapers)
JEL-codes: L52 O25 O33 P11 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Subsidizing National Champions: An Evolutionary Perspective (2011)
Chapter: Subsidizing National Champions: An Evolutionary Perspective
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2380

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