Title

Protection for Sale under Monopolistic Competition

Publication Type

Journal Article

Publication Date

2005

Abstract

This paper broadens the protection for sale model of Grossman and Helpman (1994) by incorporating the Krugman–Dixit–Stiglitz model of monopolistic competition, given its importance in explaining the prevalence of intraindustry trade. Several new results arise in this paper. First, the endogenous import tariff will never fall below zero, even in unorganized sectors. Second, the endogenous export policy for organized sectors is not necessarily an export subsidy, and can be an export tax as in unorganized sectors. Third, the level of import protection varies inversely with the degree of import penetration, regardless of whether the sector is organized or not.

Keywords

Trade policy; Political economy; Protection for sale; Monopolistic competition; Intraindustry trade

Discipline

International Economics

Research Areas

International Economics

Publication

Journal of International Economics

Volume

66

Issue

2

First Page

509

Last Page

526

ISSN

0022-1996

Identifier

10.1016/j.jinteco.2004.09.002

Publisher

Elsevier

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://dx.doi.org/10.1016/j.jinteco.2004.09.002

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