Protection for Sale in the EU

Marianna Belloc

No 100, Working Papers from Sapienza University of Rome, Department of Public Economics

Abstract: This paper presents estimation of the Grossman-Helpman (1994) model for the EU. We try to address a number of pitfalls that surround the previous empirical literature. First, we suggest a new identification strategy that enables to single out politically organized sectors with specific regard to trade policy. Second, we utilize two alternative measures of trade protection (ad-valorem equivalent of non-tariff barriers and overall restrictiveness) and adopt industrial and trade data at a high level of disaggregation. Finally, we directly obtain the structural coefficients of the model by estimating a nonlinear simultaneous equations system that is tightly linked to theory. We find that the theoretical model is broadly consistent with data and conclusions turn out internally coherent.

Keywords: Trade policy; European Union; Lobbying; Political economy; Simultaneous Equations Models (search for similar items in EconPapers)
JEL-codes: F13 F15 D71 D72 C31 (search for similar items in EconPapers)
Date: 2007-07
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Persistent link: http://EconPapers.repec.org/RePEc:sap:wpaper:100

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