سیاست استراتژیک "تحقیق و توسعه" در یک صنعت با کیفیت متمایز با صادرات سه کشور

We examine strategic research and development (R&D) policy for quality-differentiated products in a third-market trade model. We extend the previous work by adding a third exporting country, so that the market structure is international triopoly. We show that the presence of the third exporting country affects strategic R&D policies. With three exporting countries, the lowest-quality exporting country gains from taxing domestic R&D and the middle-quality exporting country gains from subsidizing domestic R&D under both Bertrand and Cournot competition. As in the duopoly case, however, the optimal unilateral policy for the highest-quality exporting country depends on the mode of competition. Various cases of policy coordination by exporting countries are also examined.

Subsidies on firms’ research and development (R&D) activities are one of the policy instruments that have attracted the greatest deal of attention in the literature of strategic trade and industrial policy since Spencer and Brander (1983) have firstly examined its strategic use. In general, there are two types of R&D: process and product R&D. The former is aimed at reducing production costs, whereas the latter is aimed at developing new products and improving product quality of existing products. Early studies on strategic R&D policy, including Spencer and Brander (1983), focused on process R&D (Bagwell and Staiger, 1992, Bagwell and Staiger, 1994, Miyagiwa and Ohno, 1997 and Muniagurria and Singh, 1997). On the other hand, recent studies have dealt with product R&D (Jinji, 2003, Park, 2001 and Zhou et al., 2002).

In this paper, we analyze strategic policy towards domestic firm's product R&D activity in an industry where goods are differentiated in quality. The novelty of this paper is to identify the nature of strategic R&D policy when there are three exporting countries. We show difference and similarity in such a policy between the case of duopoly and the case of triopoly. We use a version of the standard model of vertical product differentiation with fixed cost of quality improvement. The fixed cost of quality improvement is interpreted as R&D cost, which is sunk when firms choose prices or outputs. This paper provides an additional insight into strategic trade and industrial policy by showing that policy prescription may depend on the number of competing export countries. The difference between two and three exporting countries is important in the case of quality-differentiated industry because a “middle-quality” exporter emerges in the latter. Although a further extension of the model to the case of four or more exporters is not easy, we expect that it will only add more “middle-quality” exporters. In fact, “new entrants” by increasing the number of exporters will choose lower qualities than the lowest quality under triopoly. Thus, a difference in qualitative results between three and more than three exporters will not be as large as that between two and three exporters.