On the Equivalence of Tariffs and Quotas with Endogenous Technology Choice

Hsiu-Li Chen ()
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Hsiu-Li Chen: Department of International Trade, Ming Chuan University

Journal of Economic Development, 2000, vol. 25, issue 2, 55-67

Abstract: Due to the implementation of policies by the WTO and as a result of the GATT, tariff barriers become less important instruments for protecting domestic industry. Some non-tariff barriers have emerged as substitutes to protect domestic industries. In this paper, we endogenize technology choice, allowing domestic firms to select different levels of technology with respect to tariff or quota protection. We then find that the equivalence of tariffs and quotas do not exist. We are also able to pinpoint which type of trade protection is most effective in bringing about the technological upgrading of domestic firms.

Date: 2000
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