Abstract
We show that a market access requirement (MAR) can increase competition and reduces prices if a properly designed subsidy scheme is used to enforce the requirement. This is in contrast to most of the recent literature which has generally concluded that MARs are unambiguously anticompetitive. Our analysis underscores the importance of proper targeting and shows that it is sensitive to the composition of firms within an industry.
Keywords
Trade, Subsidies, Public Policy
Tech Report Number
1998-008
Date of this Version
1998
Recommended Citation
Krishna, Kala; Roy, Suddhasatwa; and Thursby, Marie, " Can Subsidies for MARs be Procompetitive" (1998). Purdue CIBER Working Papers. Paper 136.
https://docs.lib.purdue.edu/ciberwp/136
COinS