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Assessing the effects of tariff reform on U.S. food manufacturing industries: the role of imperfect competition and intermediate inputs

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  • Lanclos, D. Kent
  • Hertel, Thomas W.
  • Devadoss, Stephen

Abstract

Recent work indicates that the joint effects of intermediate input and final output tariff reforms on equilibrium in the differentiated final products sector are analytically ambiguous. This issue is addressed empirically for disaggregate, imperfectly competitive U.S. food manufacturing industries. The input tariff effect dominates in most industries, leading to increases in the number of U.S. firms and total industry output as a result of tariff reform. This provides evidence that the existing U.S. tariff profile discriminates against domestic food manufacturers, as input tariff effects outweigh the protection offered by output tariffs. This conclusion is robust to changes in the degree of interfirm rivalry (monopolistic competition or cournot oligopoly).

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Bibliographic Info

Article provided by Blackwell in its journal Agricultural Economics.

Volume (Year): 14 (1996)
Issue (Month): 3 (August)
Pages: 201-212

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Handle: RePEc:eee:agecon:v:14:y:1996:i:3:p:201-212

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  1. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
  2. ANDERSON, Simon P. & de PALMA, André & THISSE, Jacques-François, . "Demand for differentiated products, discrete choice models, and the characteristics approach," CORE Discussion Papers RP -824, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Vousden,Neil, 1990. "The Economics of Trade Protection," Cambridge Books, Cambridge University Press, number 9780521346696.
  4. Markusen, James R., 1981. "Trade and the gains from trade with imperfect competition," Journal of International Economics, Elsevier, vol. 11(4), pages 531-551, November.
  5. Brander, James A. & Spencer, Barbara J., 1984. "Trade warfare: Tariffs and cartels," Journal of International Economics, Elsevier, vol. 16(3-4), pages 227-242, May.
  6. Shantayanan Devarajan & Dani Rodrik, 1989. "Pro-Competitive Effects of Trade Reform: Results from a CGE Model of Cameroon," NBER Working Papers 3176, National Bureau of Economic Research, Inc.
  7. Thomas W. Hertel & J. Mark Horridge & K. R. Pearson, 1991. "Mending the Family Tree: A Reconciliation of the Linearization and Levels Schools of CGE Modelling," Centre of Policy Studies/IMPACT Centre Working Papers ip-54, Victoria University, Centre of Policy Studies/IMPACT Centre.
  8. Richard Schmalensee, 1978. "Entry Deterrence in the Ready-to-Eat Breakfast Cereal Industry," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 305-327, Autumn.
  9. Brown, D.K., 1988. "Tariffs And Capacity Utilization By Monopolistically Competitive Firms," Working Papers 229, Research Seminar in International Economics, University of Michigan.
  10. Hertel, Thomas W., 1994. "The 'procompetitive' effects of trade policy reform in a small, open economy," Journal of International Economics, Elsevier, vol. 36(3-4), pages 391-411, May.
  11. Venables, Anthony J, 1987. "Trade and Trade Policy with Differentiated Products: A Chamberlinian-Ricardian Model," Economic Journal, Royal Economic Society, vol. 97(387), pages 700-717, September.
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Cited by:
  1. Devadoss, Stephen, 1998. "Importance Of The Processed Food Sector For The U.S. Agricultural Industry," Trade Research Center Research Discussion Papers 29246, Montana State University, Department of Agricultural Economics and Economics.
  2. Anania, Giovanni, 2003. "Gains from trade liberalization with imperfectly competitive world markets. A note," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 3(06).

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