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Technology Adoption under Price Undertakings

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Author Info
Greetje Everaert

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Abstract

Economists 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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Publisher Info
Paper provided by LICOS - Centre for Institutions and Economic Performance, K.U.Leuven in its series LICOS Discussion Papers with number 13703.

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Length: 25 pages
Date of creation: 2003
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Handle: RePEc:lic:licosd:13703

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Related research
Keywords: Trade protection; Antidumping; Technology adoption; Price Undertaking;

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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 - - - Technological Change: Choices and Consequences; Diffusion Processes

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  1. Braillard, S. Lael & Verdier, Thierry, 1994. "Lobbying and adjustment in declining industries," European Economic Review, Elsevier, vol. 38(3-4), pages 586-595, April. [Downloadable!] (restricted)
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  3. Acemoglu, Daron & Robinson, James A, 1999. "Inefficient Redistribution," CEPR Discussion Papers 2122, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  4. Tornell, Aaron, 1991. "Time Inconsistency of Protectionist Programs," The Quarterly Journal of Economics, MIT Press, vol. 106(3), pages 963-74, August. [Downloadable!] (restricted)
  5. Brainard, S. Lael & Verdier, Thierry, 1997. "The political economy of declining industries: Senescent industry collapse revisited," Journal of International Economics, Elsevier, vol. 42(1-2), pages 221-237, February. [Downloadable!] (restricted)
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  6. Miravete, Eugenio J., 2003. "Time-consistent protection with learning by doing," European Economic Review, Elsevier, vol. 47(5), pages 761-790, October. [Downloadable!] (restricted)
  7. Maurizio Zanardi, 2004. "Anti-dumping: What are the Numbers to Discuss at Doha?," The World Economy, Blackwell Publishing, vol. 27(3), pages 403-433, 03. [Downloadable!] (restricted)
  8. Vandenbussche, Hylke & Veugelers, Reinhilde & Konings, Jozef, 2001. "Unionization and European Antidumping Protection," Oxford Economic Papers, Oxford University Press, vol. 53(2), pages 297-317, April.
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  11. Miyagiwa, Kaz & Ohno, Yuka, 1995. "Closing the Technology Gap under Protection," American Economic Review, American Economic Association, vol. 85(4), pages 755-70, September. [Downloadable!] (restricted)
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  12. Fudenberg, Drew & Tirole, Jean, 1985. "Preemption and Rent Equilization in the Adoption of New Technology," Review of Economic Studies, Blackwell Publishing, vol. 52(3), pages 383-401, July. [Downloadable!] (restricted)
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  14. Meredith A. Crowley, 2002. "Do safeguard tariffs and antidumping duties open or close technology gaps?," Working Paper Series WP-02-13, Federal Reserve Bank of Chicago. [Downloadable!]
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  15. Hylke Vandenbussche, 1996. "Is European antidumping protection against Central Europe too high?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 132(1), pages 116-138, March. [Downloadable!] (restricted)
  16. Kiminori Matsuyama, 1987. "Perfect Equilibria in a Trade Liberalization Game," Discussion Papers 738, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
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  17. Klaus Stegemann, 1991. "The International Regulation of Dumping: Protection Made too Easy," Working Papers 834, Queen's University, Department of Economics.
  18. Belderbos, Rene & Vandenbussche, Hylke & Veugelers, Reinhilde, 1999. "Undertakings and Antidumping Jumping FDI in Europe," CEPR Discussion Papers 2320, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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(explanations, 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.)

  1. Everaert, Greetje M.M., 2004. "The Political Economy of Restructuring and Subsidisation: An International Perspective," BOFIT Discussion Papers 12/2004, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
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