Cost effectiveness of R&D and the robustness of strategic trade policy
Juan Ruiz
Authors registered in the RePEc Author Service: Praveen Kujal
UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de EconomÃa
Abstract:
This paper analyzes the incentives for governments to impose export subsidies when firms invest in a cost saving technology before market competition. Governments first impose an export subsidy or a tax. After observing export policy, firms invest in cost reducing R and D and subsequently compete in the market. Governments subsidize exports under Cournot competition. Under Bertrand competition, export subsidies are positive whenever R and D is sufficiently costeffective at reducing marginal costs, and negative otherwise. The trade policy reversal found in models without endogenous sunk costs disappears if R and D is sufficiently cost-effective. Output subsidies are more robust than implied by the recent literature.
Date: 2003-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://e-archivo.uc3m.es/rest/api/core/bitstreams ... c693dc5f80b9/content (application/pdf)
Related works:
Working Paper: Cost effectiveness of R&D and the robustness of Strategic Trade Policy (2004)
Working Paper: Cost Effectiveness of R&D and the Robustness of Strategic Trade Policy (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:we030401
Access Statistics for this paper
More papers in UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de EconomÃa
Bibliographic data for series maintained by Ana Poveda ().