Whither Flat Panel Displays?

Kala Krishna () and Marie Thursby

No 5415, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines possible consequences of subsidies to R&D and to volume production proposed under the Clinton administration's flat panel display initiative. We do this in the context of a model in which firms behave competitively in the short run, while realizing that their choices of capacity and yield-improving R&D in the medium and long run will affect market price. Policy simulations show that steady state yields and profits are lower, while prices are higher with subsidies for capacity acquisition than with R&D subsidies. This occurs because a firm's incentives to do R&D are diminished by a subsidy on capacity costs.

JEL-codes: F1 L5 (search for similar items in EconPapers)
Date: 1996-01
Note: ITI
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Published as The Effects of US Trade Protection and Promotion Policies, R. Feenstra, ed.pp. 247-271, (Chicago: University of Chicago Press, 1997).
Published as Whither Flat Panel Displays? , Kala Krishna, Marie Thursby. in The Effects of US Trade Protection and Promotion Policies , Feenstra. 1997

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Related works:
Chapter: Whither Flat Panel Displays? (1997)
Working Paper: Whither Flat Panel Display? (1996)
Working Paper: Whither Flat Panel Displays? (1995)
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