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Import-Subsidy Coordination and the Gains from International Diffusion Of Differentiated Middle Products

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  • Hwan Lin

Abstract

This paper shows that under reasonable parameter values it is independently rational for an importing country to impose a tariff on differentiated middle products, which are invented by monopolists worldwide in the high-technology sector. But to realize mutual gains, countries must use import subsidies in a cooperative manner. To dictate policy coordination, the paper computes the bilaterally coordinated subsidy bands under different sets of parameter values, reflecting monopoly power, spending share, and supply elasticities. [F12, F13]

Suggested Citation

  • Hwan Lin, 1998. "Import-Subsidy Coordination and the Gains from International Diffusion Of Differentiated Middle Products," International Economic Journal, Taylor & Francis Journals, vol. 12(2), pages 55-76.
    • Handle: RePEc:taf:intecj:v:12:y:1998:i:2:p:55-76
    DOI: 10.1080/10168739800000013
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