I characterize the optimal export promoting policy for international markets whose structure is endogenous. Contrary to the ambiguous results of strategic trade policy for duopolies, it is always optimal to subsidize exports as long as entry is endogenous, under both competition in quantities and in prices. With homogenous goods the optimal export subsidy is a fraction 1=E of the price, where E is the elasticity of demand, the exact opposite of the optimal export tax in the neoclassical trade theory. A similar argument can be applied to show the general optimality of R&D subsidies and of competitive devaluations to promote exports in foreign markets where entry is endogenous.
|Citazione:||Etro, F. (2009). Endogenous market structures and strategic trade policy. INTERNATIONAL ECONOMIC REVIEW, 2009.|
|Tipo:||Articolo in rivista - Articolo scientifico|
|Carattere della pubblicazione:||Scientifica|
|Titolo:||Endogenous market structures and strategic trade policy|
|Data di pubblicazione:||2009|
|Rivista:||INTERNATIONAL ECONOMIC REVIEW|
|Appare nelle tipologie:||01 - Articolo su rivista|