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Beat 'em or Join 'em?: Export Subsidies Versus International Research Joint Ventures in Oligopolistic Markets

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  • J Peter Neary;

    (University College Dublin)

  • Paul O'Sullivan

    () (Department of Economics, National University of Ireland, Maynooth, Ireland.)

Abstract

This paper is concerned with comparing adversarial with co-operative 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. Because the government cannot commit to an export subsidy, such a policy may reduce welfare relative to free trade. However, except when spillovers are high, free trade may be inferior to strategic trade policy, even if firms are encouraged to engage in cooperative R&D.

Suggested Citation

  • J Peter Neary; & Paul O'Sullivan, 1997. "Beat 'em or Join 'em?: Export Subsidies Versus International Research Joint Ventures in Oligopolistic Markets," Economics, Finance and Accounting Department Working Paper Series n700897, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  • Handle: RePEc:may:mayecw:n700897
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    References listed on IDEAS

    as
    1. 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.
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    7. James A. Brander & Barbara J. Spencer, 1983. "Strategic Commitment with R&D: The Symmetric Case," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 225-235, Spring.
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    19. Goldberg, Pinelopi Koujianou, 1995. "Strategic Export Promotion in the Absence of Government Precommitment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(2), pages 407-426, May.
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    Citations

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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.

    More about this item

    Keywords

    research and development; R&D spillovers; co-operative agreements; research joint ventures (RJV's); strategic trade policy; export subsidies; commitment; dynamic consistency;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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