Publication Type
Journal Article
Version
acceptedVersion
Publication Date
7-2005
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
Citation
CHANG, Pao Li.
Protection for Sale under Monopolistic Competition. (2005). Journal of International Economics. 66, (2), 509-526.
Available at: https://ink.library.smu.edu.sg/soe_research/77
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.jinteco.2004.09.002