TY  - JOUR
AU  - Ishikawa,Jota
AU  - Spencer,Barbara J.
TI  - Rent-Shifting Export Subsidies with an Imported Intermediate Product
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5458
PY  - 1996
Y2  - February 1996
UR  - http://www.nber.org/papers/w5458
L1  - http://www.nber.org/papers/w5458.pdf
N1  - Author contact info:
Jota Ishikawa
Department of Economics
Hitotsubashi University
Kunitachi, Tokyo 186-8601
JAPAN
Tel: 81-42-580-8794;  jota@econ.hit-u.ac.jp
Fax: 81-42-580-8882
E-Mail: jota@econ.hit-u.ac.jp

Barbara J. Spencer
University of British Columbia
Sauder School of Business
2053 Main Mall
Vancouver, BC  V6T 1Z2
CANADA
Tel: 604/822-8479
Fax: 604/822-8477
E-Mail: barbara.spencer@sauder.ubc.ca
AB  - This paper argues that export subsidies aimed at shifting rents from foreign to domestic producers of a final good may also serve to shift rents to foreign firms supplying an intermediate good, weakening the incentive for the subsidy.  By contrast, assuming Cournot competition for both the final and intermediate goods, this second layer of rent-shifting between final and intermediate good firms can strengthen the argument for an export subsidy if intermediate good firms are domestic.  The domestic welfare implications of alternative rent-shifting policies (a production subsidy and an import tariff) at the intermediate good stage are also considered.
ER  -