An Example of Innovation-Inducing Tariff Protection

Swapnendu Banerjee (Bandyopadhyay)

Chapter 4 in Analytical Issues in Trade, Development and Finance, 2014, pp 63-71 from Springer

Abstract: Abstract This chapter illustrates how in a vertically differentiated domestic market with two types of consumers, tariff protection raises the incentive for quality innovation by a domestic monopolist. Similar in spirit to the Schumpeterian idea, this result is in sharp contrast to the oft-quoted argument that trade liberalization is conducive to quality innovation.

Keywords: Protection; Quality innovation; Self-selection; Discrete type; Monopoly (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/978-81-322-1650-6_4

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