Foreign-Owned Captial and Endogenous Tariffs

Marcelo Olarreaga ()

University of Geneva Economics Working Papers from University of Geneva, Department of Political Economy

Abstract: In an endogenous tariff setting, the entry of foreign-owned capital has ambiguous effects on the level of protection. In the presence of trade-promoting and trade-neutral foreign capital, lobbying pressures for a higher tariff are lower whereas if foreign capital is trade-substituting, conflicting interests may result into higher or lower lobbying pressures for tariffs. Arguments for a tariff, based on social welfare grouds, are smaller if foreign-owned capital is trade- neutral.

Keywords: TRADE; INTERNATIONAL FINANCE (search for similar items in EconPapers)
JEL-codes: F13 F21 (search for similar items in EconPapers)
Date: Written

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Working Paper: Foreign-owned capital and endogenous tariffs (1999)
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Persistent link: http://EconPapers.repec.org/RePEc:fth:geneec:96.13

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