Learning By Doing And Strategic Trade Policy
We model international rivalry between a domestic firm that is going through a leaming-by-doing phase, and a mature foreign rival. We show that the optimal production subsidy for the domestic firm depends on the degree of strategic sophistication of the foreign firm.Optimal production subsidy rules are derived under various scenarios. They are shown to be very sensitive to the specification of the game between the domestic and the foreign firms. The conduct of strategic trade policy thus requires that the home government be well informed about the degree of strategic sophistication of the foreign firm. In particular, we show that whether the government should help the domestic firm relatively more in its early infancy, with a subsidy that decreases as the firm grows, or it should promise a greater reward as the firm becomes more mature, depends on the strategic sophistication of the foreign firm.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||Feb 1998|
|Contact details of provider:|| Postal: 855 Sherbrooke St. W., Montréal, Québec, H3A 2T7|
Phone: (514) 398-3030
Fax: (514) 398-4938
Web page: http://www.repec.mcgill.ca
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rosendorff, B Peter, 1996.
"Voluntary Export Restraints, Antidumping Procedure, and Domestic Politics,"
American Economic Review,
American Economic Association, vol. 86(3), pages 544-561, June.
- Rosendorff, B.P., 1995. "Voluntary Export Restraints, Anti-Dumping Procedure and Domestic Politics," Papers 9512, Southern California - Department of Economics.
- Long, N.V. & Wong, K.Y., 1996. "Endogenous Growth and International Trade: A Survey," Discussion Papers in Economics at the University of Washington 96-07, Department of Economics at the University of Washington.
- Long, Ngo Van & Wong, Kar-Yiu, 1997. "Endogenous growth and international trade: A survey," Discussion Papers, Series II 337, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
- Long, N.V. & Wong, K.Y., 1996. "Endogenous Growth and International Trade: A Survey," Working Papers 96-07, University of Washington, Department of Economics.
- Benchekroun, Hassan & van Long, Ngo, 1998. "Efficiency inducing taxation for polluting oligopolists," Journal of Public Economics, Elsevier, vol. 70(2), pages 325-342, November.
- Hassan Benchekroun & Ngo Van Long, 1997. "Efficiency Inducing Taxation for Polluting Oligopolists," CIRANO Working Papers 97s-21, CIRANO.