The impact of “At-the-Border†and “Behind-the-Border†policies on cost-reducing research and development

Julien Berthoumieu and Bouët, Antoine
Authors registered in the RePEc Author Service: Antoine Bouët

No 1425, IFPRI discussion papers from International Food Policy Research Institute (IFPRI)

Abstract: This research paper is aimed at understanding why border trade policies are today complemented with behind-the-border policies like output subsidies, R&D subsidies, and public R&D investments. This is a new type of protectionism that becomes prominent since the 2006-2008 economic crisis. In this paper we analyze the impact of various policies on domestic cost-reducing research and development (R&D) expenditures using an international duopolistic model with uncertainty regarding the result of the R&D process. We examine the impact of “at-the-border†policies (import tariffs, import quotas, voluntary export restraints, and minimum price agreements) as well as “behind-the-border†policies (output subsidies, R&D subsidies, and public R&D investments). We demonstrate new theoretical findings, in particular the increasing then decreasing impact of quotas on R&D, as well as the impact of production subsidies, public R&D investments, and minimum price agreements on private R&D. We conclude that R&D subsidies are appealing policy instruments because they support not only domestic R&D expenditures but also domestic production and profits without reducing consumers’ surplus.

Keywords: imports; agricultural research; agricultural policies; research; trade policies; trade; subsidies; prices; tariffs (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-agr, nep-ino and nep-int
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https://hdl.handle.net/10568/150356

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Persistent link: https://EconPapers.repec.org/RePEc:fpr:ifprid:1425

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