Strategic Export Subsidies under a Budget Constraint: Ad Valorem versus Specific

This note shows that in the Brander-Spencer model of export subsidy, if there is no cost of financing subsidies, either a specific export subsidy or an ad val - orem export subsidy can be used to achieve the same maximum welfare level. If, however, there is a binding budget constraint, a specific subsidy dominates an ad valorem subsidy.

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Year of publication:	1997
Authors:	Hwang, Hong ; Miyagiwa, Kaz
Published in:	Journal of Economic Integration. - Department of Economics and Trade. - Vol. 12.1997, p. 87-98
Publisher:	Department of Economics and Trade
Subject:	Strategic \| Export \| Subsidies

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Type of publication:	Article
Classification:	F13 - Commercial Policy; Protection; Promotion; Trade Negotiations
Source:	RePEc - Research Papers in Economics

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