کد مقاله کد نشریه سال انتشار مقاله انگلیسی نسخه تمام متن
969993 1479460 2013 14 صفحه PDF دانلود رایگان
عنوان انگلیسی مقاله ISI
Subsidizing firm entry in open economies
موضوعات مرتبط
علوم انسانی و اجتماعی اقتصاد، اقتصادسنجی و امور مالی اقتصاد و اقتصادسنجی
پیش نمایش صفحه اول مقاله
Subsidizing firm entry in open economies
چکیده انگلیسی

We develop a two-country model with monopolistic competition and heterogeneous firms where entrants pay a sunk cost and randomly draw their productivity level. Governments collect lump-sum taxes and subsidize these sunk entry costs for the domestic entrepreneurs. One motive for this policy, valid already in autarky, is to tighten market selection. This selection effect leads to better firms that produce and sell more output at lower prices. In the open economy there is another, strategic motive for entry subsidies as the tightening of market selection leads to a competitive advantage for domestic producers in international trade. Our analysis shows that entry subsidies in the Nash equilibrium are first increasing, then decreasing in the level of trade freeness. Comparing the non-cooperative and the cooperative policies, we furthermore show that there is first too much and then too little entry subsidization in the course of trade integration.


► Two-country model with monopolistic competition and heterogeneous firms
► Governments collect lump-sum taxes and subsidize sunk entry costs for domestic entrepreneurs.
► In the open economy there is another, strategic motive for entry subsidies.
► Entry subsidies in the Nash equilibrium are first increasing, then decreasing in the level of trade freeness.
► There is first too much and then too little entry subsidization in the course of trade integration.

ناشر
Database: Elsevier - ScienceDirect (ساینس دایرکت)
Journal: Journal of Public Economics - Volume 97, January 2013, Pages 258–271
نویسندگان
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