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Transport efficiency, downstream R&D, and spillovers

Kazuhiro Takauchi

MPRA Paper from University Library of Munich, Germany

Abstract: This study examines the effects of higher transport efficiency on cost-reducing R&D investment and welfare in a two-way duopoly trade model with an imperfectly competitive transport sector. We show that, corresponding to the degree of the R&D spillover, higher transport efficiency can affect investment in a U-shaped fashion. We also show that higher transport efficiency can reduce total output and consumer surplus. By comparing the two cases of firm-specific carriers and duopoly carriers, we demonstrate that total output in the case of duopoly carriers is lower than that in the case of firm-specific carriers if the spillover is sufficiently large. Higher transport efficiency and competition in the transport sector may harm consumers.

Keywords: Transport efficiency; Imperfectly competitive transport sector; Cost-reducing R&D; R&D spillover (search for similar items in EconPapers)
JEL-codes: F12 L13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-ind, nep-ino, nep-mkt, nep-tre and nep-ure
Date: 2015-12-21
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