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on Economics of Strategic Management |
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Issue of 2026–05–25
three papers chosen by João José de Matos Ferreira, Universidade da Beira Interior |
| By: | Goldberg, Pinelopi; Juhász, Réka; Lane, Nathan; Lo Forte, Giulia; Thurk, Jeff |
| Abstract: | The resurgence of subsidies and industrial policies has raised concerns about their potential inefficiency and alignment with multilateral principles. Critics warn that such policies may divert resources to less efficient firms and provoke retaliatory measures from other countries, leading to a wasteful “subsidy race.” However, subsidies for sectors with inherent cross-border externalities can have positive global effects. This paper examines these issues within the semiconductor industry: a key driver of economic growth and innovation with potentially significant learning-by-doing and strategic importance due to its dual-use applications. Our study aims to: (1) document and quantify recent industrial policies in the global semiconductor sector, (2) explore the rationale behind these policies, and (3) evaluate their economic impacts, particularly their cross-border effects, and compatibility with multilateral principles. We employ historical analysis, natural language processing, and a model-based approach to measure government support and its impacts. Our findings indicate that government support has been vital for the industry’s growth, with subsidies being the primary form of support. They also highlight the importance of cross-border technology transfers through FDI, business and research collaborations, and technology licensing. China, despite significant subsidies, does not stand out as an outlier compared to other countries, given its market size. Model estimates suggest the presence of learning-by-doing at the firm-product level as well as economies of scope within a firm and substantial cross-border learning spillovers. These spillovers likely reflect cross-country technology transfers and the role of fabless clients and input suppliers in disseminating knowledge globally through their interactions with foundries. Such cross-border spillovers are not merely accidental but result from deliberate actions by market participants that cannot be taken for granted. Firms may choose to share knowledge across borders or restrict access to frontier technology, thereby excluding certain countries. Future research will use model estimates to simulate the quantitative implications of subsidies and to explore the dynamics of a “subsidy race” in the semiconductor industry. |
| Keywords: | semiconductors; industrial policy; subsidies; learning-by-doing; multilaterism |
| JEL: | F13 L63 N60 O38 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138525 |
| By: | OECD |
| Abstract: | This paper examines how subsidies affect competitive outcomes in the global steel industry. Using firm-level data from the OECD MAGIC database covering 2006–2022, the analysis assesses the relationship between government support and market-share developments across steel producers worldwide. Econometric results indicate that subsidies increase recipients’ global market share at the expense of less-subsidised competitors. Firms receiving larger support through cash grants and below-market borrowings tend to gain market share even when they exhibit weaker productivity, cost efficiency and financial performance: subsidies weaken the normal link between firm performance and market-share gains. The analysis also identifies negative spill-overs on competing firms, implying that support granted to some producers can reduce rivals’ market shares and discourage investment by unsubsidised firms. The results are consistent across OECD Members and partner economies, although subsidisation levels are significantly higher in the latter and hence the dampening of market signals is even more pronounced there. Overall, the evidence suggests that subsidies contribute to resource misallocation, persistent steel excess capacity and shifts in global competitive positions. These findings highlight the importance of greater transparency in industrial support and stronger international cooperation to reduce distortions and support a more level playing field in the global steel sector. |
| Keywords: | below-market finance, cash grants, distortions, excess capacity, government ownership, market share, steel industry |
| JEL: | H25 H32 L52 L61 |
| Date: | 2026–05–18 |
| URL: | https://d.repec.org/n?u=RePEc:oec:stiaac:191-en |
| By: | Afroza Alam; André Diegmann |
| Abstract: | This paper provides new causal evidence on how patent allowances affect firms and their employees based on quasi-random assignment of patent applications to examiners. Exploiting employer–employee records with newly linked German firm data and web-scraped patent documents, we show that patent-induced shocks reduce firm exit, improve productivity, and increase wages, with rent-sharing elasticities between 0.10 and 0.21. Wage gains are broadly observed across occupational tasks, with high heterogeneity: managers benefit disproportionately in publicly traded firms, whereas broader wage increases accrue to workers in non-traded firms. Our findings highlight the role of institutional features and firm organization in shaping how rents are shared. |
| Keywords: | innovation, firm performance, worker compensation, rent sharing |
| JEL: | O31 O34 J31 D22 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12666 |