In an endogenous tariff setting, the entry of foreign-owned capital has ambiguous effects on the level of protection. In the presence of trade-promoting and trade-neutral foreign capital, lobbying pressures for a higher tariff are lower whereas if foreign capital is trade-substituting, conflicting interests may result into higher or lower lobbying pressures for tariffs. Arguments for a tariff, based on social welfare grouds, are smaller if foreign-owned capital is trade- neutral.
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Find related papers by JEL classification: F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
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.
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Gene M. Grossman & Elhanan Helpman, 1992.
"Protection For Sale,"
NBER Working Papers
4149, National Bureau of Economic Research, Inc.
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