International R&D Collaboration and Strategic Trade Policy

11 Pages Posted: 29 Jan 2016

See all articles by Baomin Dong

Baomin Dong

Henan University; University of International Business and Economics (UIBE)

Huasheng Song

Zhejiang University - Center for Research of Private Economy (CRPE)

Xiaolin Qian

Eastspring Investment

Date Written: February 2016

Abstract

We study an international trade model with symmetric countries and symmetric firms, with countries making strategic trade policies, anticipating the decisions of firms on R&D collaboration at the subsequent stage. In general we should observe a conflict between the equilibrium outcome and the efficient one. We find that an asymmetric outcome where one country unilaterally liberalizes trade while the other does not is likely to occur. We also find that while banning international R&D collaboration may help to reach free trade equilibrium in certain situations, it provides little assistance in reaching the outcome that maximizes global welfare.

Suggested Citation

Dong, Baomin and Song, Huasheng and Qian, Xiaolin, International R&D Collaboration and Strategic Trade Policy (February 2016). Review of Development Economics, Vol. 20, Issue 1, pp. 250-260, 2016. Available at SSRN: https://ssrn.com/abstract=2724277 or http://dx.doi.org/10.1111/rode.12201

Baomin Dong

Henan University ( email )

85 Minglun St. Shunhe
Kaifeng, CA Henan 475001
China

University of International Business and Economics (UIBE) ( email )

10, Huixin Dongjie
Changyang District
Beijing, Beijing 100029
China

Huasheng Song (Contact Author)

Zhejiang University - Center for Research of Private Economy (CRPE) ( email )

Hangzhou, Zhejiang 310027
China

Xiaolin Qian

Eastspring Investment ( email )

10 Marina Boulevard, #32-01
Marina Bay Financial Centre Tower 2
Singapore, 018983
Singapore
018983 (Fax)

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