search query: @indexterm International trade / total: 2170
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| Author: | Carmen Garcia-Alonso, M. del |
| Title: | The role of technology security in a model of trade with horizontal differentiation |
| Journal: | International Journal of Industrial Organization
2000 : JUL, VOL. 18:5, p. 747-772 |
| Index terms: | R&D Exports Markets Subsidies Competition International trade Models |
| Language: | eng |
| Abstract: | The security concerns of exporters of products which might be used for military purposes have motivated different security regimes that limit the quality of the products exported by home firms. At the same time however, home governments want to ensure the competitiveness of their home companies. The optimal policy of a government facing such a trade off is analyzed. A multistage model is presented in which the government has the ability to commit to R&D subsidies but cannot credibly set its quality restrictions until the outcome of the R&D process is known. It is shown that, depending on whether some or all governments want to restrict the quality exported by the home firms, the optimal policy involves R&D subsidies or taxes together with ex post security restrictions. |
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