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Free Trade vs. Strategic Trade: A Peek into Pandora's Box / Gene M. Grossman, Giovanni Maggi.
- Format:
- Book
- Author/Creator:
- Grossman, Gene M.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w6211.
- NBER working paper series no. w6211
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Free Trade vs. Strategic Trade
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1997.
- Summary:
- We investigate whether a welfare-maximizing government ought to pursue a program of" strategic trade intervention or instead commit itself to free trade when domestic firms will have an opportunity to manipulate the government's choice of the level of" intervention. Domestic firms may overinvest in physical and knowledge capital in a regime of" strategic intervention in order to influence the government's choice of subsidy. In the event commitment to free trade may be desirable even in settings where profit-shifting would be" possible. We analyze the desirability of such a commitment when the government is well" informed about firms' types and actions, and when it suffers from an informational disadvantage."
- Notes:
- Print version record
- October 1997.
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