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Subsidizing (and Taxing) Business Procurement
This paper studies the effect of a subsidy (or tax) on suppliers in a market in which suppliers bid for the opportunity to provide goods and services to "downstream" manufacturers. The study concludes that these subsidies must be small in order to create profits greater than the amount of the subsidy.
Geography
Link
http://pages.stern.nyu.edu/~jasker/AskerSubsidies.pdf