PROTECTION VERSUS PROMOTION: AN EMPIRICAL INVESTIGATION

Devashish Mitra (), Dimitrios Thomakos and Mehmet Ulubasoglu

Chapter 12 in The Political Economy of Trade Policy:Theory, Evidence and Applications, 2016, pp 221-236 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Using Turkish industry-level data from 1983 to 1990, we find that politically organized industries receive both higher protection and promotion than unorganized ones. Tariff rates are decreasing (increasing) in the import-penetration ratio and the absolute value of the import-demand elasticity for organized (unorganized) industries. Subsidy rates are decreasing (increasing) in the output-supply elasticity for organized (unorganized) industries. The results are consistent with the predictions of the Grossman–Helpman model and its extension in this paper. The mix of protection and promotion is inversely related to the ratio of their respective marginal deadweight cost measures.

Keywords: Political Economy; Protection; Trade Policy; Tariffs; Subsidies; Reciprocal Trade Liberalization; Unilateral Trade Liberalization; Unilateralism; Reciprocity; Lobbying; Median Voter Models (search for similar items in EconPapers)
Date: 2016
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Journal Article: Protection versus Promotion: An Empirical Investigation (2004)
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