Rent-Shifting Export Subsidies with an Imported Intermediate Product / Jota Ishikawa, Barbara J. Spencer.

Format:

Book

Author/Creator:

Ishikawa, Jota.

Contributor:

National Bureau of Economic Research.

Spencer, Barbara J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5458.

NBER working paper series no. w5458

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1996.

Summary:

This paper argues that export subsidies aimed at shifting rents from foreign to domestic producers of a final good may also serve to shift rents to foreign firms supplying an intermediate good, weakening the incentive for the subsidy. By contrast, assuming Cournot competition for both the final and intermediate goods, this second layer of rent-shifting between final and intermediate good firms can strengthen the argument for an export subsidy if intermediate good firms are domestic. The domestic welfare implications of alternative rent-shifting policies (a production subsidy and an import tariff) at the intermediate good stage are also considered.

Notes:

Print version record

February 1996.