Beat 'Em or Join 'Em?: Export Subsidies Versus International Research Joint Ventures in Oligopolistic Markets

J. Peter Neary

No 1916, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper compares adversarial with cooperative industrial and trade policies in a dynamic oligopoly game in which a home and foreign firm compete in R&D and output and, because of spillovers, each firm benefits from the other’s R&D. When the government can commit to an export subsidy, such a policy raises welfare relative to cooperation, except when R&D is highly effective and spillovers are near-complete. Without commitment, however, subsidization may yield welfare levels much lower than cooperation and lower even than free trade, though qualifications to the dangers from no commitment are noted.

Keywords: Commitment; cooperative agreements; Dynamic Consistency; Export Subsidies; R&D Spillovers; Research And Development; Research Joint Ventures (RJV's); Stategic Trade Policy (search for similar items in EconPapers)
JEL-codes: F12 F13 (search for similar items in EconPapers)
Date: 1998-06
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Beat 'em or Join 'em? Export Subsidies versus International Research Joint Ventures in Oligopolistic Markets (1999)
Working Paper: Beat Em or Join Em: Export Subsidies versus International Research Joint Ventures in Oligopolistic Markets (1998)
Working Paper: Beat 'em or join 'em: export subsidies versus international research joint ventures in oligopolistic markets (1998)
Working Paper: Beat'Em Or Join'Em? Export Subsidies Versus International Research Joint Ventures in Oligopolistic Markets (1998)
Working Paper: Beat 'em or Join 'em?: Export Subsidies Versus International Research Joint Ventures in Oligopolistic Markets (1997)
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