Notice of RetractionGreen subsidy and its spillover effect in international trade

Notice of Retraction

After careful and considered review of the content of this paper by a duly constituted expert committee, this paper has been found to be in violation of IEEE´s Publication Principles.

We hereby retract the content of this paper. Reasonable effort should be made to remove all past references to this paper.

The presenting author of this paper has the option to appeal this decision by contacting TPII@ieee.org.

On the condition of the restriction by the WTO to the traditional trade policy instrument, such as export subsidy, green subsidy, as a sort of recent strategic instrument, has been adopted by a large quantity of governments. This paper considers the green subsidy and its spillover effect to behaviors of both government and firm in international trade in a multistage duopoly model. The conclusions indicate that if government gives unilateral green subsidy to the domestic firm, and set the own environmental standard according to EOS Criteria simultaneously, then the strategic impact of the green subsidy might result in the increase of the domestic welfare through changing the Cournot output and the environmental standard. Moreover, it is shown that the spillover effect can heighten the domestic environmental criteria while lower that of the other, as a result, it improve the social welfare of the competitive country in international trade owing to the extended market share.