Endogenous Protection within a framework of monopolistic competition à la Dixit –Stiglitz

María Cecilia Gáname ()
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María Cecilia Gáname: Universidad Nacional de Córdoba, Facultad de Ciencias Económicas (Córdoba, Argentina)

Revista de Economía y Estadística, 2014, vol. 52, issue 1, 87–112

Abstract: This paper studies the determination of trade policy by considering an imperfect competitive market. The model adopts the political process developed by Grossman and Helpman (1994), but it also takes into account a different economic structure, which is based on the Footloose Capital model. Two new appealing insights come from the consideration of monopolistic competition. Firstly, in this setting the interest group seems to be more worried to persuade the government to set a high tariff when it can charge a low mark-up. Secondly, the initial distribution of industry might also influence the structure of protection in one economy. / El trabajo estudia la determinación de la política comercial en un marco de competencia imperfecta. El modelo incorpora el proceso político desarrollado por Grossman and Helpman (1994), teniendo en cuenta una estructura económica diferente, basada en el modelo Footloose Capital. Dos nuevas predicciones surgen al considerar competencia imperfecta. En primer lugar, en este marco, un lobby parece estar más preocupado en persuadir al gobierno de aplicar un arancel elevado cuando puede cargar al precio un bajo mark-up. En segundo lugar, la distribución inicial de la firma puede influir en la estructura de protección en una economía.

Keywords: Endogenous trade policy; Monopolistic competition; Trade; Economic geography (search for similar items in EconPapers)
JEL-codes: F12 F13 R30 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:ief:reveye:v:52:y:2014:i:1:p:87-112

DOI: 10.55444/2451.7321.2014.v52.n1.14937

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