Register  |  Login  |  Inquiries  |  Sitemap |  
Advanced Search
Journal of Economic Integration 2008 June;23(2) :346-359.
DOI: https://doi.org/10.11130/jei.2008.23.2.346
Globally Optimal R&D Subsidy Policy: an Economist's View on the WTO Subsidy Agreement

Moonsung Kang 

Korea University
Copyright ©2008 Journal of Economic Integration
ABSTRACT

We provide economic backgrounds to the Agreement on Subsidies and Countervailing Measures under the World Trade Organization. Permitting R&D subsidy under Article 8 of the Agreement can be interpreted as an inefficient victory of an individual exporting country in the non-cooperative game, harnessing strategic relationship over a foreign rival firm into its domestic industrial policy. In addition, we show that the expiration of Article 8 can be understood as a result of the global optimum, where we maximize the sum of welfares over exporting and importing countries in the symmetric case with a linear demand.

JEL classification: F10, F13

Keywords: Strategic Trade Policy | R&D subsidies | WTO
TOOLS
PDF Links  PDF Links
Full text via DOI  Full text via DOI
Download Citation  Download Citation
  Print
Share:      
METRICS
1
Crossref
0
Scopus
4,100
View
31
Download
Capital Ownership and the Political Economy of Free Trade Agreements  2008 June;23(2)
Editorial Office
Center for Economic Integration, Sejong University, 209, Neungdong-Ro, Gwangjin-Gu,
Seoul, 05006, Korea
TEL : +82-2-3408-3338    FAX : +82-2-6935-2492   E-mail : editorial.office@e-jei.org
Browse Articles |  Current Issue |  For Authors and Reviewers |  About
Copyright© by Center for Economic Integration.      Developed in M2PI