Can subsidies for MARs be procompetitive?
AbstractIn 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 U.S. firms, we show that a MAR on U.S. imports is procompetitive as long as the U.S. firms are the ones targeted to receive the subsidy.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 34 (2001)
Issue (Month): 1 (February)
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Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
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Other versions of this item:
- Kala Krishna & Suddhasatwa Roy & Marie C. Thursby, 2000. "Can Subsidies for MARs be Procompetitive?," NBER Working Papers 7624, National Bureau of Economic Research, Inc.
- Krishna, K. & Roy, S. & Thursby, M., 1998. "Can Subsidies for MARs be Procompetitive," Papers 98-008, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
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