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Quality–Price Competition and Product R&D Investment Policies in Developing and Developed Countries

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  • Yasunori Ishii

Abstract

type="main" xml:id="ecor12076-abs-0001"> This study establishes a third-country trade model where firms from developing and developed countries invest into product R&D under their governments' subsidisation policies to analyse firms' quality–price choices and governments' optimal product R&D investment policies. We show that a rise in the developing (developed) country's product R&D subsidy makes firms' quality–price competition more (less) intense and that the governments' optimal product R&D policies, depending on the features of their quality and demand functions, can both be subsidies even under Bertrand price competition, contrary to the findings of previous studies.

Suggested Citation

  • Yasunori Ishii, 2014. "Quality–Price Competition and Product R&D Investment Policies in Developing and Developed Countries," The Economic Record, The Economic Society of Australia, vol. 90(289), pages 197-206, June.
    • Handle: RePEc:bla:ecorec:v:90:y:2014:i:289:p:197-206
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    File URL: http://hdl.handle.net/10.1111/ecor.2014.90.issue-289
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    Cited by:

    1. Yoonho Choi & E. Kwan Choi, 2021. "Selling High-Tech Inputs to the Enemy," CESifo Working Paper Series 8886, CESifo.
    2. Yasunori Ishii, 2017. "International asymmetric R&D rivalry and industrial strategy," Journal of Economics, Springer, vol. 122(3), pages 267-278, November.
    3. Choi, Yoonho & Kwan Choi, E., 2018. "Quality competition in north-south trade," International Journal of Production Economics, Elsevier, vol. 201(C), pages 216-224.
    4. Choi, Yoonho & Choi, E. Kwan, 2021. "Selling high-tech inputs to the enemy," International Journal of Production Economics, Elsevier, vol. 234(C).
    5. Yumiko Taba & Yasunori Ishii, 2016. "Product R&D Investment Policies in an International Duopoly," Review of Development Economics, Wiley Blackwell, vol. 20(2), pages 574-582, May.
    6. Julien Berthoumieu & Viola Lamani, 2016. "Vertical Differentiation, Uncertainty, Product R&D and Policy Instruments in a North-South Duopoly," Working Papers hal-01285559, HAL.
    7. Ram Kumar Phuyal, 2016. "Imposition of R&D Subsidy in a Product Differentiated Duopolistic Industry," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 6(6), pages 336-351, June.

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