TY  - JOUR
AU  - Krishna,Kala
AU  - Roy,Suddhasatwa
AU  - Thursby,Marie C.
TI  - Can Subsidies for MARs be Procompetitive?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7624
PY  - 2000
Y2  - March 2000
UR  - http://www.nber.org/papers/w7624
L1  - http://www.nber.org/papers/w7624.pdf
N1  - Author contact info:
Kala Krishna
Department of Economics
523 Kern Graduate Building
The Pennsylvania State University
University Park, PA 16802
Tel: 814/865-1106
Fax: 814/863-4775
E-Mail: kmk4@psu.edu

Marie C. Thursby
College of Management
Georgia Institute of Technology
800 West Peachtree Street, NW
Atlanta, GA 30308-1149
Tel: 404/894-6249
Fax: 404/385-4894
E-Mail: marie.thursby@mgt.gatech.edu
AB  - In contrast to recent literature, we show that market access requirements (MARs) can be implemented in a procompetitive manner even in the absence of threats in related markets. By focusing on subsidies that are paid only when the requirement is met, we show that a MAR can increase aggregate output relative to free trade provided that the right set of firms is targeted. In the context of a model with multiple Japanese and US firms, we show that a MAR on US imports is procompetitive as long as the US firms are the ones targeted to receive the subsidy.
ER  -