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Is An Export Subsidy A Robust Trade Policy Recommendation Toward A Unionized Duopoly?

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  • JIE MA

Abstract

Brander and Spencer (1988) and Bandyopadhyay et al. (2000) imply that the robust trade policy recommendation toward a unionized duopoly is an export subsidy. In this paper, we show that we cannot get such a result even in the linear case if the opportunity cost of public funds is sufficiently high. However, if we consider the case where the domestic firm and the trade union lobby the government to set favorable trade policies by giving the government political contributions, then the result of robustness will be restored if the government cares about political contributions sufficiently relative to national welfare. Copyright 2008 The Author. Journal compilation 2008 Blackwell Publishing Ltd.

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  • Jie Ma, 2008. "Is An Export Subsidy A Robust Trade Policy Recommendation Toward A Unionized Duopoly?," Economics and Politics, Wiley Blackwell, vol. 20(2), pages 141-155, June.
  • Handle: RePEc:bla:ecopol:v:20:y:2008:i:2:p:141-155
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    File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0343.2007.00326.x
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    Cited by:

    1. Takauchi, Kazuhiro, 2015. "Strategic export policy, monopoly carrier, and product differentiation," MPRA Paper 66003, University Library of Munich, Germany.

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