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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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.
Length: Date of creation: 2002 Date of revision: Handle: RePEc:ags:aaea02:19682
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Grossman, Gene M & Helpman, Elhanan, 1994.
"Protection for Sale,"
American Economic Review,
American Economic Association, vol. 84(4), pages 833-50, September.
[Downloadable!] (restricted)
Other versions:
Gene M. Grossman & Elhanan Helpman, 1992.
"Protection For Sale,"
NBER Working Papers
4149, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)