The existence of firms with different levels of efficiency within a country plays an important role in this in-depth analysis of industrial and trade policies in a multi-country trade-theoretic framework. Sajal Lahiri and Yoshiyasu Ono examine various industrial policies, R&D subsidies and trade policies under conditions of imperfect competition in a product market created by the presence of Cournot oligopolistic interdependence in production. Trade is defined broadly to include trade in commodity as well as trade in capital, specifically foreign direct investment. While the first part of the book focuses on commodity trade and assumes full employment, the latter considers foreign direct investment and assumes the presence of unemployment. Given the importance of industrial policies and the prevalence of imperfect competition, together with ongoing attention to theoretical issues concerning industrial economics, this research will excite interest amongst researchers, advanced students and policy makers in this field.
Sajal Lahiri is the Vandeveer Professor of Economics at Southern Illinois University at Carbondale, Illinois. He has published papers widely on international trade and development economics. Yoshiyasu Ono is Professor of Economics at the Institute of Social and Economic Research, Osaka University. He is the author of numerous books and papers on industrial organization, international trade and dynamic macroeconomics.
List of figures; List of tables; Preface; Introduction; 1. Cost asymmetry and industrial policy in a closed economy; 2. R&D policy; 3. Trade and industrial policy under foreign penetration; 4. Trade and industrial policy under asymmetric oligopoly: a synthesis; 5. Trade policy when producers and sellers differ; 6. Foreign penetration in the presence of unemployment; 7. Local content requirement and profit taxation; 8. Export-oriented foreign direct investment; 9. Lobbying for local content requirement; 10. Foreign direct investment in the presence of cross-hauling; Bibliography; Index.