Citation

Discussion Paper Details

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Title: Beat 'Em or Join 'Em?: Export Subsidies Versus International Research Joint Ventures in Oligopolistic Markets

Author(s): J Peter Neary

Publication Date: June 1998

Keyword(s): Commitment, cooperative agreements, Dynamic Consistency, Export Subsidies, R&D Spillovers, Research And Development, Research Joint Ventures (RJV's) and Stategic Trade Policy

Programme Area(s): International Trade and Regional Economics

Abstract: This paper compares adversarial with cooperative industrial and trade policies in a dynamic oligopoly game in which a home and foreign firm compete in R&D and output and, because of spillovers, each firm benefits from the other?s R&D. When the government can commit to an export subsidy, such a policy raises welfare relative to cooperation, except when R&D is highly effective and spillovers are near-complete. Without commitment, however, subsidization may yield welfare levels much lower than cooperation and lower even than free trade, though qualifications to the dangers from no commitment are noted.

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Bibliographic Reference

Neary, J. 1998. 'Beat 'Em or Join 'Em?: Export Subsidies Versus International Research Joint Ventures in Oligopolistic Markets'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1916