| Strategic Export Subsidies under a Budget Constraint: Ad Va l o rem versus Specific |
Hong Hwang, Kaz Miyagiwa, Kar-yiu Wong, |
National Taiwan University and ISSP, Academia Sinica
Louisiana State University
University of Washington |
| Copyright ©1997 The Journal of Economic Integration |
| ABSTRACT |
|
|
This note shows that in the Brander-Spencer model of export subsidy, if there is no cost of financing subsidies, either a specific export subsidy or an ad val orem export subsidy can be used to achieve the same maximum welfare level. If, however, there is a binding budget constraint, a specific subsidy dominates an ad valorem subsidy. (JEL Classification: F13) |
|
| |
| REFERENCE |
| 1. |
Hwang, H., K. Miyagiwa and K.-Y. Wong [1995], "Optimal Te c h n o l o g y Choice and Immizerizing Export Subsidy," unpublished manuscript. |
|
|
| 2. |
Eaton, J. and G. Grossman [1988], "Optimal Trade and Industrial Policy under Oligopoly," Quarterly Journal of Economics; pp. 383-406. |
|
|
| 3. |
Wong, K.-Y. [1995], International Trade in Goods and Factor Mobility, Cambridge, Mass.: MIT Press. |
|
|
|
|
|
|
PDF Links
Full text via DOI
Download Citation 
Print 
