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The role of technology security in a model of trade with horizontal differentiation

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  • del Carmen Garcia-Alonso, Maria

Abstract

The security concerns of exporters of products which might be used for military purposes have motivated different security regimes that limit the quality of the products exported by home firms. At the same time however, home governments want to ensure the competitiveness of their home companies. We analyze the optimal policy of a government facing such a trade off. We present a multistage model in which the government has the ability to commit to R&D subsidies but cannot credibly set its quality restrictions until the outcome of the R&D process is known.
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  • del Carmen Garcia-Alonso, Maria, 2000. "The role of technology security in a model of trade with horizontal differentiation," International Journal of Industrial Organization, Elsevier, vol. 18(5), pages 747-772, July.
    • Handle: RePEc:eee:indorg:v:18:y:2000:i:5:p:747-772
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    1. Morton I. Kamien & Yair Tauman, 1986. "Fees Versus Royalties and the Private Value of a Patent," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(3), pages 471-491.
    2. Barbara J. Spencer & James A. Brander, 1983. "International R & D Rivalry and Industrial Strategy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 50(4), pages 707-722.
    3. Levine, Paul & Smith, Ron, 1995. "The Arms Trade and Arms Control," Economic Journal, Royal Economic Society, vol. 105(429), pages 471-484, March.
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    Cited by:

    1. García-Alonso, María D.C. & Levine, Paul, 2008. "Strategic procurement, openness and market structure," International Journal of Industrial Organization, Elsevier, vol. 26(5), pages 1180-1190, September.
    2. Maria del Carmen Garcia-Alonso & Keith Hartley, 2000. "Export controls, market structure and international coordination," Defence and Peace Economics, Taylor & Francis Journals, vol. 11(3), pages 481-503.
    3. Gangopadhyay Partha, 2014. "A Formal Model of Arms Market with Cash-for-Favours," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 20(3), pages 411-428, August.
    4. Yoad Shefi & Asher Tishler, 2005. "The Effects Of The World Defense Industry And Us Military Aid To Israel On The Israeli Defense Industry: A Differentiated Products Model," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(6), pages 427-448.
    5. Saar Golde & Asher Tishler, 2004. "Security Needs, Arms Exports, and the Structure of the Defense Industry," Journal of Conflict Resolution, Peace Science Society (International), vol. 48(5), pages 672-698, October.

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    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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