In this paper we examine optimal strategic trade policy under oligopoly with many home and foreign firms when the firms have different levels of efficiency. The first-best policy involves a structure of firm-specific export subsidies and export taxes in which the government favours the most...

This Paper discusses a number of issues in the context of the debate on intellectual property in less developed countries (LDCs). It starts by discussing the consequences of IP enforcement in LDCs for global innovation and welfare in poorer countries. It then considers the costs and benefits of...

What is the impact of terrorism on trade through higher security at the borders? We set up a theory which shows that the impact goes not only from terrorism to trade; higher trade with a partner might, in turn, increase the probability of terrorism acts and make security measures more costly for...

We show that the nature and extent of trade is significantly affected by the pricing policy that firms are allowed to employ. A switch from discriminatory to non-discriminatory pricing (e.g. strict anti-dumping laws) leads to a switch from two-way trade to one-way trade. It is far from true that...

Anti-dumping policies are often justified as legitimate actions by governments in their efforts to protect domestic producers from unfair foreign competition. We investigate the impact of anti-dumping rules on firms' production decisions as to how much and where to produce. Anti-dumping measures...

We set up a simple trade model with two countries hosting one firm each. The firms invest in cost-reducing R&D, and each government may grant R&D subsidies to the domestic firm. We show that it is optimal for a government to provide higher R&D subsidies the lower the level of trade costs, even...

This paper sees countertrade as a means by which the PCPEs (previously centrally planned economies) and LDCs extract some of the monopoly profits from firms in OECD countries to subsidize their exports. Viewed in this way, countertrade is an exchange of market entry for marketing assistance in...

The large reduction in tariff rates worldwide under several rounds of the GATT is commonly credited with being one of the most notable economic policy accomplishments since World War II. However, the remarkable progress towards free trade of goods is unparalleled in trade with services where...