Entry Liberalization, Export Subsidy and R&D
AbstractWe examine, in the context of less developed countries, the R&D behaviour of igopolistic firms who compete over R&D, as well as output levels. We also assume that the firms can sell in either of the two markets - the domestic, or the foreign. We show that entry liberalization, despite increasing the level of competitiveness, does not affect the level of R&D. An increase in export subsidy may, however, lead to an increase in domestic R&D. Both these results contradict the popular argument that the levels of domestic R&D is positively related to the level of domestic competitiveness. We also demonstrate that any foreign firm that may enter selects a level of R&D that is atleast as efficient as that selected by any domestic firm. Finally, we demonstrate that entry liberalization has a positive effect on exports, as well as aggregate output.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 1532.
Date of creation: Feb 2006
Date of revision:
Entry liberalization; export subsidy; R&D; competitiveness;
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-28 (All new papers)
- NEP-COM-2007-01-28 (Industrial Competition)
- NEP-CSE-2007-01-28 (Economics of Strategic Management)
- NEP-DEV-2007-01-28 (Development)
- NEP-IPR-2007-01-28 (Intellectual Property Rights)
- NEP-MIC-2007-01-28 (Microeconomics)
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.:
- Ruffin, R J, 1971. "Cournot Oligopoly and Competitive Behaviour," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 38(116), pages 493-502, October.
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