Can Import Protection Become Export Promotion?

Chris Stefanadis

Working Papers from New York University, Leonard N. Stern School of Business, Department of Economics

Abstract: The argument that import protection can become export promotion is examined from the marketing standpoint. The cornerstone of the analysis is the presence of horizontal differentiation. In the model, protection by the home government allows domestic firms to sell their products to the portion of the home market that was previously served by foreign firms; the new product space "locations" chosen by domestic firms are closer to the tastes of mainstream foreign consumers. Hence, protection in the home market may allow domestic producers to capture a larger market share and earn more profits in export markets than they otherwise would. Another finding of the model is that a free trade regime does not necessarily lead to the socially optimal product space "locations"; in this resepct, the world welfare maximum may involve positive tariffs.

Date: 1995-07
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ste:nystbu:95-07

Access Statistics for this paper

More papers in Working Papers from New York University, Leonard N. Stern School of Business, Department of Economics New York University, Leonard N. Stern School of Business, Department of Economics, 44 West 4th Street, New York, NY 10012-1126. Contact information at EDIRC.
Bibliographic data for series maintained by Amanda Murphy ( this e-mail address is bad, please contact ).