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| Jiaqi Chen, Sang-Ho Lee and Timur K. Muminov |
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| ''Welfare-reducing discriminatory output subsidies with mixed ownership and R&D'' |
| ( 2021, Vol. 41 No.3 ) |
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| This study examines the welfare-reducing effect of time-consistent discriminatory output subsidies under duopolistic R&D competition with a semi-public firm. Contrary to the committed case with mixed ownership, we find that the private firm invests more in R&D than the semi-public firm to induce the government to grant higher subsidy, which results in higher output production than the semi-public firm. We also show that optimal discriminatory subsidy rates are higher (lower) than uniform subsidy rates for a sufficiently high (low) degree of privatization, which could decrease (increase) social welfare. |
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| Keywords: mixed ownership; discriminatory output subsidies; R&D competition |
JEL: L3 - Nonprofit Organizations and Public Enterprise: General
H2 - Taxation, Subsidies, and Revenue: General |
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| Manuscript Received : Jan 18 2021 | | Manuscript Accepted : Sep 17 2021 |
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