"at-the-border" and "behind-the-border" policies: What impact on cost-reducing R&D?

Les politiques « à la frontière » et « derrière la frontière »: quel impact sur la R&D réductrice de coût?

Julien Berthoumieu and Antoine Bouët
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Julien Berthoumieu: GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper evaluates 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 subsidy, R&D subsidy, public R&D investment). R&D subsidies are appealing policy instruments because they support not only local R&D expenditures but also local production and profits without reducing consumers' surplus. A welfare analysis concludes on the superiority of either production subsidy or import tariff.

Date: 2017
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Published in Revue Economique, inPress, 68 (4), pp.549-570. ⟨10.3917/reco.684.0549⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03122503

DOI: 10.3917/reco.684.0549

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