Advanced Search
MyIDEAS: Login to save this article or follow this journal

R&D Policy Competition with Process Innovation in a Multi-Product Duopoly

Contents:

Author Info

  • Stephen Jui-Hsien Chou

    ()
    (Department of Economics, National Tsing Hua University, Taiwan)

Registered author(s):

    Abstract

    This paper considers a reciprocal dumping model which consists of two countries, each owning a multi-product firm which sells products to both countries. The firms choose the R&D investment portfolio for their products, and a government may subsidize or tax its domestic firm for the R&D investment. It is shown that a firm invests more in R&D for its core (non-core) product if products are sufficiently differentiated (similar) to each other. Moreover, if a firm invests more in its non-core product than its core product, it does that to an extent such that the non-core product becomes the core product after the R&D process. Policy competition results in a unilateral incentive of a subsidy, and the stable optimal policy is always a subsidy. When two governments harmonize their policies, it is optimal for them to set subsidies to zero. The optimal subsidy in a duopoly is higher than that in a monopoly if and only if two governments' policies are strategic substitutes.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.bapress.ca/ref/v3-4/1923-7529-2013-04-53-24.pdf
    Download Restriction: no

    Bibliographic Info

    Article provided by Better Advances Press, Canada in its journal Review of Economics & Finance.

    Volume (Year): 3 (2013)
    Issue (Month): (November)
    Pages: 53-76

    as in new window
    Handle: RePEc:bap:journl:130404

    Contact details of provider:
    Postal: 17 Alton Towers Circle, Unit 101 Toronto, ON, M1V3L8, Canada
    Phone: +1-647-728-3961
    Web page: http://www.bapress.ca

    Order Information:
    Postal: 17 Alton Towers Circle, Unit 101 Toronto, ON, M1V3L8, Canada
    Email:

    Related research

    Keywords: Process innovation; Subsidy; Multiproduct firm; Trade;

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Robert W. Staiger & Kyle Bagwell, 1990. "The Sensitivity of Strategic and Corrective R&D Policy in Oligopolistic Industries," NBER Working Papers 3236, National Bureau of Economic Research, Inc.
    2. Haaland, Jan I. & Kind, Hans Jarle, 2004. "R&D Policies, Trade and Process Innovation," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4784, C.E.P.R. Discussion Papers.
    3. Dermot Leahy & J. Peter Neary, 2000. "Robust Rules for Industrial Policy in open Economies," Working Papers, School Of Economics, University College Dublin 200021, School Of Economics, University College Dublin.
    4. D Leahy & J.P. Neary, 1998. "Strategic Trade and Industrial PolicyTowards Dynamic Oligopolies," CEP Discussion Papers, Centre for Economic Performance, LSE dp0409, Centre for Economic Performance, LSE.
    5. Barbara J. Spencer & James A. Brander, 1983. "International R&D Rivalry and Industrial Strategy," NBER Working Papers 1192, National Bureau of Economic Research, Inc.
    6. Leahy, Dermot & Neary, J Peter, 2007. "Multilateral Subsidy Games," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6479, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:bap:journl:130404. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bill Yan).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.