Free Trade vs Strategic Trade: A Peek into Pandora's Box
Giovanni Maggi and
Gene Grossman ()
Working Papers from Princeton, Woodrow Wilson School - Public and International Affairs
We investigate whether a welfare-maximising government ought to pursue a program of strategic trade intervention or instead commit itself to free trade when, in the former case, domestic firms will have an opportunity to manipulate the government's choice of the level of intervention. Domestic firms may overinvest in physical and knowledge capital in a regime of strategic intervention in order to influence the government's choice of subsidy.
Keywords: EXPORTS; TRADE POLICY (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
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Working Paper: Free Trade Vs. Strategic Trade: A Peek into Pandora's Box (1998)
Working Paper: Free Trade vs. Strategic Trade: A Peek into Pandora's Box (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:priwpu:190
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