Export subsidies and high productivity: cause or effect?
de Meza, D.
(1986).
Export subsidies and high productivity: cause or effect?
Canadian Journal of Economics,
19(2), 347-350.
(1986).
Export subsidies and high productivity: cause or effect?
Canadian Journal of Economics,
19(2), 347-350.
According to the emerging strategic theory of trade policy, countries selling in imperfectly competitive world markets may benefit from export subsidies. This paper demonstrates that the theory predicts that it is the countries with the lowest production costs that offer the highest subsidies. It is argued that this result diminishes the attraction of the theory as a positive explanation of trade policy.