The contractionary effects of protectionist trade policy

Carlos Uribe-Terán (), Diego F. Grijalva () and Ivan Gachet
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Carlos Uribe-Terán: Universidad San Francisco de Quito USFQ
Diego F. Grijalva: Universidad San Francisco de Quito USFQ
Ivan Gachet: World Bank

Review of World Economics (Weltwirtschaftliches Archiv), 2025, vol. 161, issue 3, No 1, 868 pages

Abstract: Abstract We examine the firm-level effects of temporary safeguard import tariffs implemented by Ecuador in 2015–2017. The unexpected safeguards affected about one-third of imports, including intermediate inputs and final goods, creating varying exposure among firms and industries due to their unique import profiles. Using a difference-in-difference approach, we analyze immediate, short-run, and medium-run effects on importing and local non-importing firms. While importing firms experienced temporary negative effects-reduced import growth, sales, and input demand-that disappeared after the safeguards ended, local non-importing firms suffered persistent adverse impacts through their supply chains, particularly in non-import-competing industries.

Keywords: Trade policy; Protectionism; Input–output linkages; Emerging markets; Latin America (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10290-025-00582-8

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