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Subsidies and Countervailing Duties with Firm Heterogeneity

In: Strategic Trade Policy

Author

Listed:
  • Jota Ishikawa
  • Yoshimasa Komoriya

Abstract

The WTO allows importing countries to impose countervailing duties (CVDs) when subsidies provided in exporting countries cause serious injuries. This chapter examines the effects of CVDs as well as those of subsidies. Using an international oligopoly model, direct export subsidies and capital subsidies are explored in the presence of heterogeneity among recipients. All recipient firms gain from export subsidies, but this may not be the case for capital subsidies. The maximum CVD allowed under the WTO rules may be more than enough to offset the injury caused by a capital subsidy.

Suggested Citation

  • Jota Ishikawa & Yoshimasa Komoriya, 2026. "Subsidies and Countervailing Duties with Firm Heterogeneity," World Scientific Book Chapters, in: Strategic Trade Policy, chapter 7, pages 153-169, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789819805921_0007
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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F1 - International Economics - - Trade
    • F10 - International Economics - - Trade - - - General
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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