2017
DOI: 10.1111/sjpe.12152
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Newspapers and public grants: A matter of quality

Abstract: The present paper deals with the issue of newspaper subsidies in a framework of endogenous quality provision. We compare monopoly and duopoly cases in a vertically differentiated model. For monopolies we show that a per-copy subsidy reduces quality. Conversely, in duopolies in the vertically differentiated model, we show that a state subsidy might increase the quality of the low-quality newspaper and decrease the quality of the high-quality newspaper.

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Cited by 5 publications
(4 citation statements)
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References 19 publications
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“…Ukraine is an equal member of the world community. It actively participates in the creation, formation and development of the information society (Battaggion & Vaglio, 2018).…”
Section: Literature Reviewmentioning
confidence: 99%
“…Ukraine is an equal member of the world community. It actively participates in the creation, formation and development of the information society (Battaggion & Vaglio, 2018).…”
Section: Literature Reviewmentioning
confidence: 99%
“…Although press subsidies have been in use by governments for centuries, their effects are unclear, and it has been difficult to isolate causal relationships between subsidies and specific outcomes in the industry or among audiences. Most of the evidence is therefore merely indicative or in other ways ambiguous, and econometric models that have attempted to predict subsidy effects (Battaggion & Vaglio, 2017;Kind & Møen, 2014;Leroch & Wellbrock, 2011) still lack empirical validation. For instance, whereas the acclaimed negative effects of raised tax rates on newspaper sales often get alarmistic proportions in the political debate, the actual observed evidence of the effects is both scarce and uncertain (Kind & Møen, 2014).…”
Section: The Effects Of Media Subsidiesmentioning
confidence: 99%
“…In theory, press subsidies may help to remedy market failure related to journalistic content, to foster knowledge externalities, and to increase diversity and quality of news (e.g., Kind & Møen, 2015). However, if poorly implemented, press subsidies promote inefficient behavior (Picard, 2003) and lead to lower journalistic quality (Battaggion & Vaglio, 2018; Leroch & Wellbrock, 2011). Press subsidies in Sweden have the main goal to maintain local opinion diversity by helping unprofitable newspapers to survive (Ots, 2009).…”
Section: Introductionmentioning
confidence: 99%