This paper provides a general characterization of optimal export promoting policies for foreign competitive markets and apply it to strategic trade policy and exchange rate policy. Contrary to the ambiguous results of strategic trade policy under barriers to entry in the third market, I find that it is always optimal to subsidize exports as long as entry is free (under both strategic substitutability and complementarity) and I explicitly derive the optimal export subsidies under Cournot and Bertrand competition. Finally, I show that there is always a strategic incentive to implement competitive devaluations when entry in foreign markets is free, but not otherwise.

Etro, F. (2006). Strategic Export Promotion [Working paper del dipartimento].

Strategic Export Promotion

ETRO, FEDERICO
2006

Abstract

This paper provides a general characterization of optimal export promoting policies for foreign competitive markets and apply it to strategic trade policy and exchange rate policy. Contrary to the ambiguous results of strategic trade policy under barriers to entry in the third market, I find that it is always optimal to subsidize exports as long as entry is free (under both strategic substitutability and complementarity) and I explicitly derive the optimal export subsidies under Cournot and Bertrand competition. Finally, I show that there is always a strategic incentive to implement competitive devaluations when entry in foreign markets is free, but not otherwise.
Working paper del dipartimento
Scientifica
Export Promotion; Strategic Trade policy; Export Subsidies; Competitive Devaluation
English
Etro, F. (2006). Strategic Export Promotion [Working paper del dipartimento].
Etro, F
File in questo prodotto:
File Dimensione Formato  
Strategic_Export_Promotion.pdf

accesso aperto

Tipologia di allegato: Other attachments
Dimensione 519.44 kB
Formato Adobe PDF
519.44 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/23052
Citazioni
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
Social impact