On the equivalence and nonequivalence of import subsidies and export subsidies

The purpose of this paper is to verify whether the Lerner symmetry theorem holds for export subsidies and import subsidies in an endogenous growth model with international location of manufactures. In this paper, we show that the Lerner symmetry theorem, which states that a country’s export subsidies and import subsidies have the same resource allocation effect, does not hold in the aspects of international manufacture mobility and world economic growth rate. In particular, in contrast to the Lerner symmetry theorem, we show that export subsidies and import subsidies in the same location have rather opposite effects in these two aspects.