Please use this identifier to cite or link to this item:
Title: Opportunity cost, trade policies and the efficiency of firms
Authors: Goh, A.-T. 
Keywords: Opportunity cost
Technological effort
Trade policies
Issue Date: 2000
Citation: Goh, A.-T. (2000). Opportunity cost, trade policies and the efficiency of firms. Journal of Development Economics 62 (2) : 363-383. ScholarBank@NUS Repository.
Abstract: This paper analyzes the effects of trade policies on the technological effort of a firm entering a new market in the context of a developing country. We depart from previous literature by bringing into focus the opportunity cost of technological effort. A firm that spends time in acquiring a more efficient technology delays the commercialization of its products, thus incurring an opportunity cost in terms of profits forgone. Protection increases both the opportunity cost and the benefits from technological effort. In the case of linear demand function and constant returns to scale technology, protection is shown to unambiguously reduce the protected firm's technological effort. Export subsidy is also shown to reduce technological effort when the potential level of exports under free trade is high. (C) 2000 Elsevier Science B.V. All rights reserved.
Source Title: Journal of Development Economics
ISSN: 03043878
DOI: 10.1016/S0304-3878(00)00089-4
Appears in Collections:Staff Publications

Show full item record
Files in This Item:
There are no files associated with this item.


checked on May 24, 2023


checked on May 24, 2023

Page view(s)

checked on May 25, 2023

Google ScholarTM



Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.