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Implementing Market Access

  • Krishna, Kala
  • Roy, Suddhasatwa
  • Thursby, Marie

This paper examines ex post subsidies as a means of enforcing market share targets. Subsidies set after firms make their strategic decisions are shown to create powerful incentives for firms to raise prices. These effects are stronger when targets, and hence subsidies, are specified on a firm-specific rather than industry-wide basis. This occurs because firms perceive themselves as subject to more competition (i.e., more elastic demand) in the latter case. Copyright 1998 by Blackwell Publishing Ltd.

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Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 6 (1998)
Issue (Month): 4 (November)
Pages: 529-44

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Handle: RePEc:bla:reviec:v:6:y:1998:i:4:p:529-44
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References listed on IDEAS
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  1. Ethier, W.J. & Horn, H., 1993. "Results-Oriented Trade Policy," ISER Discussion Paper 0304, Institute of Social and Economic Research, Osaka University.
  2. Brainard, S. Lael & Martimort, David, 1997. "Strategic trade policy with incompletely informed policymakers," Journal of International Economics, Elsevier, vol. 42(1-2), pages 33-65, February.
  3. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
  4. Pinelopi K. Goldberg & Michael M. Knetter, 1995. "Causes and Consequences of the Export Enhancement Program for Wheat," NBER Working Papers 5359, National Bureau of Economic Research, Inc.
  5. Gruenspecht, Howard K., 1988. "Export subsidies for differentiated products," Journal of International Economics, Elsevier, vol. 24(3-4), pages 331-344, May.
  6. Douglas A. Irwin, 1994. "Managed Trade," Books, American Enterprise Institute, number 51697, 3.
  7. James A. Brander & Barbara J. Spencer, 1984. "Export Subsidies and International Market Share Rivalry," NBER Working Papers 1464, National Bureau of Economic Research, Inc.
  8. Kala Krishna, 1989. "The Case of the Vanishing Revenues: Auction Quotas with Monopoly," NBER Working Papers 2840, National Bureau of Economic Research, Inc.
  9. Douglas A. Irwin, 1994. "Trade Politics and the Semiconductor Industry," NBER Working Papers 4745, National Bureau of Economic Research, Inc.
  10. Kowalczyk, Carsten, 1994. "Monopoly and trade policy," Journal of International Economics, Elsevier, vol. 36(1-2), pages 177-186, February.
  11. Dinopoulos, Elias & Kreinin, Mordechai E, 1990. "An Analysis of Import Expansion Policies," Economic Inquiry, Western Economic Association International, vol. 28(1), pages 99-108, January.
  12. Jonathan Eaton & Gene M. Grossman, 1983. "Optimal Trade and Industrial Policy Under Oligopoly," NBER Working Papers 1236, National Bureau of Economic Research, Inc.
  13. Kala Krishna & Suddhasatwa Roy & Marie Thursby, 1997. "Procompetitive Market Access," NBER Working Papers 6184, National Bureau of Economic Research, Inc.
  14. Carmichael, Calum M., 1987. "The control of export credit subsidies and its welfare consequences," Journal of International Economics, Elsevier, vol. 23(1-2), pages 1-19, August.
  15. Greaney, Theresa M., 1996. "Import now! An analysis of market-share voluntary import expansions (VIEs)," Journal of International Economics, Elsevier, vol. 40(1-2), pages 149-163, February.
  16. Kala Krishna, 1985. "Trade Restrictions as Facilitating Practices," NBER Working Papers 1546, National Bureau of Economic Research, Inc.
  17. Neil Bjorksten, 1994. "Voluntary Import Expansions and Voluntary Export Restraints in an Oligopoly Model with Capacity Constraints," Canadian Journal of Economics, Canadian Economics Association, vol. 27(2), pages 446-57, May.
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