On the Use of Competition Policy to Enhance the Effectiveness of Industrial Policy.
Motivated by the observation that many countries with an active industrial policy also have a lax competition policy, this paper argues that restricting firm numbers may be a means of rendering industrial policy more effective. A simple model is set up in which a subsidy is desirable to correct a general externality but may induce over-entry. Restricting the number of firms then renders the subsidy policy more effective in correcting the externality problem. Copyright 1999 by Blackwell Publishing Ltd
Year of publication: |
1999
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Authors: | Richardson, Martin ; Knowles, Stephen |
Published in: |
Review of Development Economics. - Wiley Blackwell. - Vol. 3.1999, 1, p. 58-65
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Publisher: |
Wiley Blackwell |
Saved in:
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