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Regulatory protection when firms decide first on technical collaboration and R&D

Author

Listed:
  • Joanna Poyago-Theotoky

    (School of Economics, La Trobe University)

  • Huw Edwards

    (School of Business and Economics, Loughborough University, U.K.)

Abstract

We investigate the imposition of a horizontal technical barrier to trade (HTBT) in a symmetric, cross-hauling duopoly. Tariffs and subsidies are ruled out, but, in the absence of a mutual recognition agreement, it is possible for governments to impose HTBTs, so long as firms apply different technologies. If firms are first movers, this possibility may induce them to avoid technical collaboration, in order to tempt governments into creating national monopolies, except where spillovers and R&D effects are high. This exacerbates the costs of regulatory protection, compared to standard models without R&D or spillovers.

Suggested Citation

  • Joanna Poyago-Theotoky & Huw Edwards, 2012. "Regulatory protection when firms decide first on technical collaboration and R&D," Working Papers 2012.05, School of Economics, La Trobe University.
    • Handle: RePEc:trb:wpaper:2012.05
    Note: ISSN-1837-2198
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    References listed on IDEAS

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    Cited by:

    1. Cai, Dapeng & Jørgensen, Jan Guldager, 2017. "Mutual Recognition for Sale: International Bargaining over Product Standards," Discussion Papers on Economics 1/2017, University of Southern Denmark, Department of Economics.
    2. Jørgensen, Jan Guldager & Schröder, Philipp J.H., 2014. "Harmonization versus Mutual Recognition: Some pitfalls for the coordination of product standards under imperfect competition," Discussion Papers on Economics 23/2014, University of Southern Denmark, Department of Economics.
    3. Poyago-Theotoky, Joanna & Tsai, Yingyi, 2023. "Universally strong IPR protection and global welfare: A market-penetration perspective," Economic Modelling, Elsevier, vol. 124(C).

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    More about this item

    Keywords

    Research and development; spillovers; trade; protection;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F19 - International Economics - - Trade - - - Other
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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