Can Subsidies for MARs be Procompetitive?

Kala Krishna (), Suddhasatwa Roy and Marie Thursby

No 7624, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In contrast to recent literature, we show that market access requirements (MARs) can be implemented in a procompetitive manner even in the absence of threats in related markets. By focusing on subsidies that are paid only when the requirement is met, we show that a MAR can increase aggregate output relative to free trade provided that the right set of firms is targeted. In the context of a model with multiple Japanese and US firms, we show that a MAR on US imports is procompetitive as long as the US firms are the ones targeted to receive the subsidy.

JEL-codes: F13 (search for similar items in EconPapers)
Date: 2000-03
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published as Canadian Journal of Economics, Volume: 34 Issue: 1 (February 2001) Pages: 212-224

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Related works:
Journal Article: Can subsidies for MARs be procompetitive? (2001)
Working Paper: Can Subsidies for MARs be Procompetitive (1998)
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