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Testing Protection For Sale In The Food Industries

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Author Info
Lopez, Rigoberto
Hathie, Ibrahima

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Abstract

This paper tests the Grossman-Helpman Protection for Sale model using panel data from U.S. food processing industries with endogenous protection, import penetration, and political campaign. The results support the key predictions of the model: organized industries are granted higher protection that decreases with import penetration and the price elasticity of imports. Furthermore, the presence of import quotas raises the level of protection substantially. The estimated weight on aggregate welfare is strikingly similar those found by Goldberg and Maggi (1999) and Gawande and Bandopadhyay (2000), implying that protection is not for sale in these industries.

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Publisher Info
Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2002 Annual meeting, July 28-31, Long Beach, CA with number 19682.

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Date of creation: 2002
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Handle: RePEc:ags:aaea02:19682

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Keywords: Agribusiness;

References listed on IDEAS
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  1. Kishore Gawande & Usree Bandyopadhyay, 2000. "Is Protection for Sale? Evidence on the Grossman-Helpman Theory of Endogenous Protection," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 139-152, February. [Downloadable!] (restricted)
  2. Robert C. Feenstra, 1996. "U.S. Imports, 1972-1994: Data and Concordances," NBER Working Papers 5515, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Reinert, Kenneth A. & Roland-Holst, David W., 1992. "Armington elasticities for United States manufacturing sectors," Journal of Policy Modeling, Elsevier, vol. 14(5), pages 631-639, October. [Downloadable!] (restricted)
  4. Lopez, Rigoberto A & Pagoulatos, Emilio, 1996. "Trade Protection and the Role of Campaign Contributions in U.S. Food and Tobacco Industries," Economic Inquiry, Oxford University Press, vol. 34(2), pages 237-48, April.
  5. Devashish Mitra, 1999. "Endogenous Lobby Formation and Endogenous Protection: A Long-Run Model of Trade Policy Determination," American Economic Review, American Economic Association, vol. 89(5), pages 1116-1134, December. [Downloadable!] (restricted)
  6. Trefler, Daniel, 1993. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 138-60, February. [Downloadable!] (restricted)
  7. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-50, September. [Downloadable!] (restricted)
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  8. Pinelopi Koujianou Goldberg & Giovanni Maggi, 1999. "Protection for Sale: An Empirical Investigation," American Economic Review, American Economic Association, vol. 89(5), pages 1135-1155, December. [Downloadable!] (restricted)
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  9. Gardner, Bruce L, 1987. "Causes of U.S. Farm Commodity Programs," Journal of Political Economy, University of Chicago Press, vol. 95(2), pages 290-310, April. [Downloadable!] (restricted)
  10. Lopez, Rigoberto A & Pagoulatos, Emilio, 1994. " Rent Seeking and the Welfare Cost of Trade Barriers," Public Choice, Springer, vol. 79(1-2), pages 149-60, April.
  11. Jong-Wha Lee & Phillip Swagel, 1994. "Trade Barriers and Trade Flows across Countries and Industries," NBER Working Papers 4799, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Anderson, Kym, 1980. "The Political Market for Government Assistance to Australian Manufacturing Industries," The Economic Record, The Economic Society of Australia, vol. 56(153), pages 132-44, June.
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