The paper empirically investigates international productivity convergence in the manufacturing sector, which was found not converging in earlier studies. The authors analyze subsectors of aggregate manufacturing in order to compare similar technologies and to avoid the mixing of converging and...

In a homogeneous-good duopoly game with a home and a foreign firm, which compete on prices, it has been shown that the optimal way to assist the domestic industry is by a production subsidy. The argument here is that the subsidy is used to keep potential competitive pressure on the foreign firm....