TY  - JOUR
AU  - Krishna, Kala
AU  - Thursby, Marie
TI  - Whither Flat Panel Displays?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5415
PY  - 1996
Y2  - January 1996
DO  - 10.3386/w5415
UR  - http://www.nber.org/papers/w5415
L1  - http://www.nber.org/papers/w5415.pdf
N1  - Author contact info:
Kala Krishna
Department of Economics
523 Kern Graduate Building
The Pennsylvania State University
University Park, PA 16802
Tel: 814/865-1106
Fax: 814/863-4775
E-Mail: kmk4@psu.edu

Marie C. Thursby
College of Management
Georgia Institute of Technology
800 West Peachtree Street, NW
Atlanta, GA 30308-1149
Tel: 404/894-6249
Fax: 404/385-4894
E-Mail: mariethursby30@gmail.com
M1  - published as Kala Krishna, Marie Thursby. "Whither Flat Panel Displays?," in Robert C. Feenstra, editor, "The Effects of U.S. Trade Protection and Promotion Policies" University of Chicago Press (1997)

AB  - This paper examines possible consequences of subsidies to R&D and to volume production proposed under the Clinton administration's flat panel display initiative.  We do this in the context of a model in which firms behave competitively in the short run, while realizing that their choices of capacity and yield-improving R&D in the medium and long run will affect market price.  Policy simulations show that steady state yields and profits are lower, while prices are higher with subsidies for capacity acquisition than with R&D subsidies.  This occurs because a firm's incentives to do R&D are diminished by a subsidy on capacity costs.
ER  -