 Liberalization, quality and welfare: removing the Italian VER on Japanese car exportsNo 1996052, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Abstract: Both the theoretical and the empirical literature on international trade agree that quantitative restrictions on trade have an impact on the average quality of exports. Yet, in evaluating (ex-ante) trade policy effects, there are no studies tiling into account the role of the change in quality. In this paper the choice of quality is endogenized in a two-stage game in a model which is calibrated to the Italian car market, one of the mast protected in Europe. Simulating the removal of the VER on Japanese exports, there are substantial gains from liberalization when only quantity effects are considered. Results change dramatically if quality effects are taken into account: the downgrading in Japanese exports entails a strong reduction in consumers' gains. Keywords: VERs; Quality; Automotive industry (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1996052 Access Statistics for this paper More papers in LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC. |
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