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Regulatory Protection When Firms Decide First on Technical Collaboration and R&D

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  • Huw Edwards
  • Joanna Poyago-Theotoky

Abstract

We investigate the imposition of a horizontal technical barrier to trade (HTBT) in a symmetric, cross-hauling duopoly. Tariffs and subsidies are ruled out, but, in the absence of a mutual recognition agreement, it is possible for governments to impose HTBTs, so long as firms apply different technologies. If firms are first movers, this possibility may induce them to avoid technical collaboration, in order to tempt governments into creating national monopolies, except where spillovers and R&D effects are high. This exacerbates the costs of regulatory protection, compared to standard models without R&D or spillovers.
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Suggested Citation

  • Huw Edwards & Joanna Poyago-Theotoky, 2013. "Regulatory Protection When Firms Decide First on Technical Collaboration and R&D," Review of International Economics, Wiley Blackwell, vol. 21(4), pages 750-764, September.
  • Handle: RePEc:bla:reviec:v:21:y:2013:i:4:p:750-764
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    File URL: http://hdl.handle.net/10.1111/roie.12068
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    Cited by:

    1. Cai, Dapeng & Jørgensen, Jan Guldager, 2017. "Mutual Recognition for Sale: International Bargaining over Product Standards," Discussion Papers of Business and Economics 1/2017, University of Southern Denmark, Department of Business and Economics.
    2. Jørgensen, Jan Guldager & Schröder, Philipp J.H., 2014. "Harmonization versus Mutual Recognition: Some pitfalls for the coordination of product standards under imperfect competition," Discussion Papers of Business and Economics 23/2014, University of Southern Denmark, Department of Business and Economics.

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F19 - International Economics - - Trade - - - Other
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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