Tariff Rebate on Intermediate Inputs for Exportables in a Two-Period Model with Learning-from-Exporting

Saqib Jafarey () and Sajal Lahiri
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Saqib Jafarey: City University

Chapter Chapter 2 in International Trade, Resource Mobility and Adjustments in a Changing World, 2024, pp 21-32 from Springer

Abstract: Abstract This paper develops a two-period, perfectly competitive model of international trade of a small open economy with the following features. The country is a net importer of an intermediate input, and there is an import tariff on this good in period 1. The exporting firms that use this intermediate input receive a rebate on its imports in period 1. There are transaction costs of exports in both periods. However, the transaction cost in period 2 is a decreasing function of the amount of exports made in period 1, implying some degree of learning-from-doing in exports. Net tax revenue is used to provide a public good. In this framework, we determine and characterise, inter alia, the optimal level of rebate given to the exporting sector on tariffs paid on imported intermediate inputs.

Keywords: VAT; Tariffs; Government revenue; Tariff rebate; Export promotion; F1; O2; O5 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-981-97-5652-0_2

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DOI: 10.1007/978-981-97-5652-0_2

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