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

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Author Info

  • J Peter Neary;

    (University College Dublin)

  • Paul O'Sullivan

    ()
    (Department of Economics, National University of Ireland, Maynooth, Ireland.)

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    Abstract

    This paper is concerned with comparing adversarial with co-operative 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. Because the government cannot commit to an export subsidy, such a policy may reduce welfare relative to free trade. However, except when spillovers are high, free trade may be inferior to strategic trade policy, even if firms are encouraged to engage in cooperative R&D.

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    File URL: http://economics.nuim.ie/sites/economics.nuim.ie/files/working-papers/N700897.pdf
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    Bibliographic Info

    Paper provided by Department of Economics, Finance and Accounting, National University of Ireland - Maynooth in its series Economics, Finance and Accounting Department Working Paper Series with number n700897.

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    Length: 22 pages
    Date of creation: 1997
    Date of revision:
    Handle: RePEc:may:mayecw:n700897

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    Postal: Maynooth, Co. Kildare
    Phone: 353-1-7083728
    Fax: 353-1-7083934
    Web page: http://economics.nuim.ie
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    Related research

    Keywords: research and development; R&D spillovers; co-operative agreements; research joint ventures (RJV's); strategic trade policy; export subsidies; commitment; dynamic consistency;

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    Cited by:
    1. Dewit, Gerda & Leahy, Dermot, 2001. "Rivalry in Uncertain Export Markets: Commitment versus Flexibility," CEPR Discussion Papers 2771, C.E.P.R. Discussion Papers.
    2. Leahy, Dermot & Naghavi, Alireza, 2006. "Intellectual Property Rights and Entry into a Foreign Market: FDI vs Joint Ventures," CEPR Discussion Papers 5672, C.E.P.R. Discussion Papers.
    3. Alireza Naghavi, 2003. "Strategic Intellectual Property Protection Policy and North-South Technology Transfer," Working Papers 200313, School Of Economics, University College Dublin.
    4. Alireza Naghavi & Dermot Leahy, 2008. "Intellectual Property Rights and North-South Joint Ventures," Center for Economic Research (RECent) 017, University of Modena and Reggio E., Dept. of Economics.

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