Technology Adoption under Price Undertakings
AbstractEconomists most often analyse the effects of protectionist or antidumping policies in the context of tariffs or voluntary export restraints - the latter are very similar to quotas in fact. Antidumping policies in the European Union however make frequent use of price undertakings. Whereas the effects of tariff and quota protection on technology adoption have been demonstrated by Miyagiwa and Ohno (1995), no such analysis has been carried out for price undertakings. In contrast to previous analysis, this article shows that adoption of new technologies is always delayed under a regime of price undertakings, as compared to the case of free trade, and that this doesn't depend on whether protection is temporary or permanent. Thus, our results challenge some of the conclusions of Miyagiwa and Ohno (1995) and put further doubt on the infant-industry argument for protection. We further analyse the sensitivity of the timing of technology adoption to the instrument of protection and formulate policy recommendations on the basis of this analysis.
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Bibliographic InfoPaper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 13703.
Length: 25 pages
Date of creation: 2003
Date of revision:
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Trade protection; Antidumping; Technology adoption; Price Undertaking;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
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