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Do safeguard tariffs and antidumping duties open or close technology gaps?

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  • Crowley, Meredith A.

Abstract

This paper examines how the country-breadth of tariff protection can affect the technology adoption decisions of both domestic import-competing and foreign exporting firms. The analysis is novel in that shows how firm-level technology adoption changes under tariffs of different country-breadth. I show that a country-specific tariff like an antidumping duty induces both domestic import-competing firms and foreign exporting firms to adopt a new technology earlier than they would under free trade. In contrast, a broadly-applied tariff like a safeguard can accelerate technology adoption by a domestic import-competing firm, but will slow-down technology adoption by foreign exporting firms. Because safeguard tariffs can delay the foreign firm's adoption of new technology, the worldwide welfare costs associated with using them may be larger than is generally believed.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 68 (2006)
Issue (Month): 2 (March)
Pages: 469-484

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Handle: RePEc:eee:inecon:v:68:y:2006:i:2:p:469-484

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Web page: http://www.elsevier.com/locate/inca/505552

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References

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  1. Thomas J. Prusa, 2001. "On the spread and impact of anti-dumping," Canadian Journal of Economics, Canadian Economics Association, vol. 34(3), pages 591-611, August.
  2. Jennifer F. Reinganum, 1981. "Market Structure and the Diffusion of New Technology," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 618-624, Autumn.
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Citations

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Cited by:
  1. Pierce, Justin R., 2011. "Plant-level responses to antidumping duties: Evidence from U.S. manufacturers," Journal of International Economics, Elsevier, vol. 85(2), pages 222-233.
  2. Bruce Blonigen & Thomas Prusa, 2003. "The Cost of Antidumping: the Devil is in the Details," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 6(4), pages 233-245.
  3. Rodney D. Ludema & Taizo Takeno, 2007. "Tariffs and the adoption of clean technology under asymmetric information," Canadian Journal of Economics, Canadian Economics Association, vol. 40(4), pages 1100-1117, November.
  4. Greetje Everaert, 2003. "The Political Economy of Restructuring and Subsidisation: An International Perspective," LICOS Discussion Papers 13003, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  5. MUKUNOKI Hiroshi, 2013. "Market Access and Technology Adoption in the Presence of FDI," Discussion papers 13040, Research Institute of Economy, Trade and Industry (RIETI).
  6. Laura Rovegno, 2013. "Trade protection and market power: evidence from US antidumping and countervailing duties," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 149(3), pages 443-476, September.
  7. C. Carter & S. Mohapatra, 2013. "Inventories and antidumping: the case of orange juice trade," Empirical Economics, Springer, vol. 45(1), pages 247-266, August.
  8. Ederington, Josh & McCalman, Phillip, 2009. "Infant Industry Protection and Industrial Dynamics," MPRA Paper 22361, University Library of Munich, Germany.
  9. Meredith A. Crowley, 2003. "An introduction to the WTO and GATT," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q IV, pages 42-57.
  10. MIYAGIWA, Kaz & SONG, Huasheng & VANDENBUSSCHE, Hylke, 2010. "Innovation, antidumping and retaliation," CORE Discussion Papers 2010064, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  11. Meredith A. Crowley, 2001. "Antidumping policy under imperfect competition," Working Paper Series WP-01-21, Federal Reserve Bank of Chicago.
  12. Aleksandr Vashchilko, 2013. "Vertically related markets, tariffs, and technology adoption," Journal of Economics, Springer, vol. 110(3), pages 273-286, November.
  13. Ederington, Josh & McCalman, Phillip, 2013. "Technology adoption, government policy and tariffication," Journal of International Economics, Elsevier, vol. 90(2), pages 337-347.
  14. Ederington, Josh & McCalman, Phillip, 2008. "Endogenous firm heterogeneity and the dynamics of trade liberalization," Journal of International Economics, Elsevier, vol. 74(2), pages 422-440, March.

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