DISC, FSC, and the cost of capital in the export sector

DISC and FSC are two trade policy instruments of the United States that proV'ide a tax incentive for exporting. The two measures provide a stimulus for investment in the export sector by reduci.ng the cost of capital for exporting firms. According to a model based on the neoclassical theory of optimum capital accumulation, the minimum effect either DISC or FSC can have is surprisingly small, reducing the cost of capital by less than percent in either case. The maximum effect is large, reducing the cost of capital in the export sector by around 20 percent. However, the maximum effect of DISC and FSC is accompanied by side-effects that reduce economic efficiency significantly. These results therefore call into question the effectiveness of DISC and FSC as instruments of trade policy.

Name thesis:degree_name

Master of Arts

Level thesis:degree_level

masters

Discipline thesis:degree_discipline

Economics

Department dc:contributor.department

Economics

Grantor dc:publisher

Virginia Polytechnic Institute and State University

Year dc:date.issued

1985

Author dc:creator

• Brumbaugh, David

Statement dc:rights

• In Copyright

Licence dc:rights.uri

• http://rightsstatements.org/vocab/InC/1.0/

Language dc:language.iso

en_US

Handle dc:identifier.uri

http://hdl.handle.net/10919/74513

OAI identifier oai:identifier

oai:vtechworks.lib.vt.edu:10919/74513