Administrative Delays as Barriers to Trade
AbstractWe study a two-country model where two firms, one domestic and the other foreign, must decide when to introduce their new product into the market. The home government may apply an import tariff, an administrative delay or both to the product of the foreign firm. An administrative delay imposes a waiting period between the time when the quality of the foreign product is determined and the time when the product can actually be sold. Our main interest is the differential effect of the tariff and the administrative delay on the timing of new product introductions and the resulting changes in home, foreign and world welfare. We show that administrative delays are less efficient instruments for maximizing home welfare than tariffs. With a tariff, the home government can affect the timing of entry to ensure that the domestic firm moves first at the socially optimal date. Although an optimally chosen delay can achieve the same pattern of introduction, it does not yield any tariff revenues. As a result, if the tariff may be set optimally, administrative delays are not used in a discriminatory manner. If trade liberalization constrains the import tariff to be below its domestically optimal level, discriminatory administrative delays may become part of the optimal policy of the home country. As the optimal delay policy leads to lower levels of world welfare than the optimal tariff, trade liberalization can be welfare decreasing.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3007.
Date of creation: Oct 2001
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
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.:
- Miyagiwa, Kaz & Ohno, Yuka, 1995.
"Closing the Technology Gap under Protection,"
American Economic Review,
American Economic Association, vol. 85(4), pages 755-70, September.
- Miyagiwa, K. & Ohno, Y., 1993. "Closing the Technology Gap Under Protection," Discussion Papers in Economics at the University of Washington 93-09, Department of Economics at the University of Washington.
- Miyagiwa, K. & Ohno, Y., 1993. "Closing the Technology Gap Under Protection," Working Papers 93-09, University of Washington, Department of Economics.
- Prokop, Jacek & Regibeau, Pierre & Rockett, Katharine, 2010.
"Minimum quality standards and novelty requirements in a one-short development race,"
Economics - The Open-Access, Open-Assessment E-Journal,
Kiel Institute for the World Economy, vol. 4(15), pages 1-49.
- Prokop, Jacek & Regibeau, Pierre & Rockett, Katharine, 2009. "Minimum quality standards and novelty requirements in a one-shot development race," Economics Discussion Papers 2009-33, Kiel Institute for the World Economy.
- Chahir Zaki, 2010.
"Towards An Explicit Modeling Of Trade Facilitation In Cge Models: Evidence From Egypt,"
515, Economic Research Forum, revised Apr 2010.
- Zaki, Chahir, 2010. "Towards an explicit modeling of trade facilitation in CGE models: evidence from Egypt," MPRA Paper 23353, University Library of Munich, Germany, revised 14 Jun 2010.
- Bagai, Shweta & Wilson, John S., 2006. "The data chase : what's out there on trade costs and nontariff barriers ?," Policy Research Working Paper Series 3899, The World Bank.
- Antoni Estevadeordal & Matthew Shearer & Kati Suominen, 2009. "Market Access Provisions in Regional Trade Agreement," IDB Publications 9311, Inter-American Development Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.