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Strategic Export Subsidies under a Budget Constraint: Ad Valorem versus Specific

Author

Listed:
  • Hwang, Hong

    (National Taiwan University and ISSP, Academia Sinica)

  • Miyagiwa, Kaz

    (Louisiana State Unive)

Abstract

This note shows that in the Brander-Spencer model of export subsidy, if there is no cost of financing subsidies, either a specific export subsidy or an ad val - orem export subsidy can be used to achieve the same maximum welfare level. If, however, there is a binding budget constraint, a specific subsidy dominates an ad valorem subsidy.

Suggested Citation

  • Hwang, Hong & Miyagiwa, Kaz, 1997. "Strategic Export Subsidies under a Budget Constraint: Ad Valorem versus Specific," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 12, pages 87-98.
    • Handle: RePEc:ris:integr:0040
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    Citations

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    Cited by:

    1. Kuang-Cheng Andy Wang & Ping-Yao Chou & Wen-Jung Liang, 2018. "Specific versus ad valorem taxes in the presence of cost and quality differences," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(5), pages 1197-1214, October.
    2. K.L. Glen Ueng & Tsaur‐Chin Wu & Chih‐Ta Yen & Chih‐Ting Chou, 2022. "Market concentration and superiority among strategic export subsidy policies with taxation distortion and cost heterogeneity," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(2), pages 276-292, April.
    3. Wen-Jung Liang & Kuang Cheng Andy Wang & Ping-Yao Chou, 2018. "The superiority among specific, demand ad valorem and cost ad valorem subsidy regimes," Journal of Economics, Springer, vol. 123(1), pages 1-21, January.
    4. Hong Hwang & Chao-Cheng Mai & Ya-Po Yang, 2015. "Specific vs Ad Valorem Strategic Export Subsidies with Taxation Distortion," Review of Development Economics, Wiley Blackwell, vol. 19(4), pages 820-828, November.

    More about this item

    Keywords

    Strategic; Export; Subsidies;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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