Targeted export promotion with several oligopolistic industries

Avinash K. Dixit, Gene M. Grossman

Research output: Contribution to journalArticlepeer-review

83 Scopus citations

Abstract

We study export promotion policies in situations where several oligopolistic industries compete for the services of a sector-specific factor of production. The partial equilibrium argument for strategic subsidies must be modified to incorporate general equilibrium effects working through the factor market. We find that these effects generally weaken the case for profit-shifting subsidies. In a benchmark case with symmetric exporting industries, fixed coefficients technologies and an inelastic supply of the specific factor, free trade is shown to be optimal.

Original languageEnglish (US)
Pages (from-to)233-249
Number of pages17
JournalJournal of International Economics
Volume21
Issue number3-4
DOIs
StatePublished - Nov 1986

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

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