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Beat 'em or join 'em: export subsidies versus international research joint ventures in oligopolistic markets

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  • Neary, J. Peter
  • O'Sullivan, Paul

Abstract

This paper compares adversarial with cooperative industrial and trade policies in a dynamic oligopoly game in which a home and foreign firm compete in R&D and output and, because of spillovers, each firm benefits from the other''s R&D. When the government can commit to an export subsidy, such a policy raises welfare relative to cooperation, except when R&D is highly effective and spillovers are near-complete. Without commitment, however, subsidisation may yield welfare levels much lower than cooperation and lower even than free trade, though qualifications to the dangers from no commitment are noted.

Suggested Citation

  • Neary, J. Peter & O'Sullivan, Paul, 1998. "Beat 'em or join 'em: export subsidies versus international research joint ventures in oligopolistic markets," LSE Research Online Documents on Economics 20247, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:20247
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    References listed on IDEAS

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    Cited by:

    1. Paul O'Sullivan, 2014. "DEMAND UNCERTAINTY, R&D LEADERSHIP AND RESEARCH JOINT VENTUREs," Economics, Finance and Accounting Department Working Paper Series n252-14.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    2. Neary, J Peter & Leahy, Dermot, 2000. "Strategic Trade and Industrial Policy towards Dynamic Oligopolies," Economic Journal, Royal Economic Society, vol. 110(463), pages 484-508, April.
    3. Dewit, Gerda & Leahy, Dermot, 2004. "Rivalry in uncertain export markets: commitment versus flexibility," Journal of International Economics, Elsevier, vol. 64(1), pages 195-209, October.
    4. Paul O'Sullivan, 2013. "Research Joint Ventures: A Barrier To Entry?," Economics, Finance and Accounting Department Working Paper Series n246-13.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    5. Paul O'Sullivan, 2014. "R&D Leadership And Research Joint Ventures," Economics, Finance and Accounting Department Working Paper Series n251-14.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    6. Jo, Seung-gyu & den Butter, Frank A. G., 2009. "Pros and Cons of Backing Winners in Innovation Policy," MPRA Paper 17658, University Library of Munich, Germany.
    7. Alireza Naghavi & Dermot Leahy, 2006. "Intellectual Property Rights and Entry into a Foreign Market: FDI vs. Joint Ventures," Working Papers 2006.97, Fondazione Eni Enrico Mattei.
    8. Julie DeCourcy, 2007. "Research Joint Ventures And International Competitiveness: Evidence From The National Cooperative Research Act," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 16(1), pages 51-65.
    9. Thanh Le & Cuong Le Van, 2016. "Trade Liberalisation and Optimal R&D Policies in a Model of Exporting Firms Conducting Process Innovation," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01314650, HAL.
    10. Alireza Naghavi & Dermot Leahy, 2008. "Intellectual Property Rights and North-South Joint Ventures," Center for Economic Research (RECent) 017, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
    11. Thanh Le & Cuong Le Van, 2014. "Trade Liberalization and Optimal R&D Policies with Process Innovation," Working Papers 2014-119, Department of Research, Ipag Business School.
    12. repec:hal:journl:halshs-01314650 is not listed on IDEAS
    13. Haaland, Jan I. & Kind, Hans Jarle, 2008. "R&D policies, trade and process innovation," Journal of International Economics, Elsevier, vol. 74(1), pages 170-187, January.
    14. Alireza Naghavi, 2003. "Strategic intellectual property protection policy and North-South technology transfer," Working Papers 200313, School of Economics, University College Dublin.
    15. Paul O'Sullivan, 2013. "Less Is More? Research Joint Ventures And Entry Deterrence," Economics, Finance and Accounting Department Working Paper Series n245-13.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    16. Aikaterini KOKKINOU, 2010. "Economic growth, innovation and collaborative research and development activities," Management & Marketing, Economic Publishing House, vol. 5(1), Spring.

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    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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