Bericht
Selection, trade, and employment: The strategic use of subsidies
We study how the interaction between economic openness and competitive selection affects the effectiveness of employment (and entry) subsidisation. Within a twocountry heterogeneous-firms model with endogenous labour supply, we find that optimal employment subsidies are always positive even though they can have pro- or anti-competitive effects on industry selection depending on whether the economy is open or not. We also find that selection effects resulting from international competition and fiscal externalities may imply that non-cooperative policies entail under-subsidisation of employment. Whilst always having procompetitive selection effects on the industry, entry subsidies are shown to be less effective in raising employment and welfare than employment subsidies.
- Language
-
Englisch
- Bibliographic citation
-
Series: WWWforEurope Policy Paper ; No. 21
- Classification
-
Wirtschaft
Investment; Capital; Intangible Capital; Capacity
Incomes Policy; Price Policy
Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
Open Economy Macroeconomics
- Subject
-
optimal policy
employment subsidies
competitive selection
international trade
- Event
-
Geistige Schöpfung
- (who)
-
Molana, Hassan
Montagna, Catia
- Event
-
Veröffentlichung
- (who)
-
WWWforEurope
- (where)
-
Vienna
- (when)
-
2015
- Handle
- Last update
-
10.03.2025, 11:46 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Bericht
Associated
- Molana, Hassan
- Montagna, Catia
- WWWforEurope
Time of origin
- 2015
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