Article ID Journal Published Year Pages File Type
10477154 Journal of International Economics 2005 18 Pages PDF
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.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
Authors
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