IDEAS home Printed from https://ideas.repec.org/a/wly/canjec/v34y2001i1p212-224.html

Can subsidies for MARs be procompetitive?

Author

Listed:
  • Kala Krishna
  • Suddhasatwa Roy
  • Marie Thursby

Abstract

In contrast to recent literature, we show that market access requirements (MARs) can be implemented in a procompetitive manner even in the absence of threats in related markets. By focusing on subsidies that are paid only when the requirement is met, we show that a MAR can increase aggregate output relative to free trade provided that the right set of firms is targeted. In the context of a model with multiple Japanese and U.S. firms, we show that a MAR on U.S. imports is procompetitive as long as the U.S. firms are the ones targeted to receive the subsidy. JEL Classification: F13 Est‐ce que les subventions pour promouvoir la pénétration du marchéétranger peuvent promouvoir la concurrence? Contrairement à ce qui ressort de la littérature spécialisée récente, les auteurs montrent que l'on peut mettre en place des mesures pour promouvoir la pénétration du marchéétranger de telle manière que cela promeuve la concurrence, et ce même en l'absence de menaces dans des marchés reliés. En mettant l'accent sur les subventions payées quand les objectifs de pénétration sont remplis, on montre que de telles pratiques peuvent accroîre le niveau de production par rapport à ce qu'il serait dans un monde de libre‐échange pourvu que le bon ensemble de firmes soit ciblé. Dans un modèle où coexistent plusieurs firmes américaines et japonaises, on montre que de tels efforts quand ils portent sur les importations en provenance des Etats‐Unis promeuvent la concurrence tant que ce sont les firmes américaines qui reçoivent la subvention.

Suggested Citation

  • Kala Krishna & Suddhasatwa Roy & Marie Thursby, 2001. "Can subsidies for MARs be procompetitive?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 34(1), pages 212-224, February.
  • Handle: RePEc:wly:canjec:v:34:y:2001:i:1:p:212-224
    DOI: 10.1111/0008-4085.00071
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/0008-4085.00071
    Download Restriction: no

    File URL: https://libkey.io/10.1111/0008-4085.00071?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Qiu, Larry D. & Spencer, Barbara J., 2002. "Keiretsu and relationship-specific investment: implications for market-opening trade policy," Journal of International Economics, Elsevier, vol. 58(1), pages 49-79, October.
    2. Jan Bouckaert & Bruno De Borger, 2013. "Price competition between subsidized organizations," Journal of Economics, Springer, vol. 109(2), pages 117-145, June.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:canjec:v:34:y:2001:i:1:p:212-224. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1540-5982 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.