Domestic export subsidy and foreign welfare |
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| Affiliation: | 1. Center for Industrial and Business Organization, Dongbei University of Finance and Economics, Dalian, 116025, China;2. Hitotsubashi Institute for Advanced Study, Hitotsubashi University, 2-1, Naka Kunitachi, Tokyo 186-8601, Japan;3. The University of Manitoba, Department of Economics, Winnipeg, MB, R3T 5V5, Canada |
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| Abstract: | In this paper we present an analysis based on imperfect competition to examine the conditions under which an export subsidy of the domestic country will not only increase its own welfare, but also raise the welfare of the importing country and hence the world as a whole. Under these conditions, it is then suggested that relaxation of GATT restrictions on export subsidies might be feasible to some extent. |
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