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Did Late Nineteenth Century U.S. Tariffs Promote Infant Industries? Evidence from the Tinplate Industry

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  • Dougas A. Irwin
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    Abstract

    This paper examines the role of late nineteenth century U.S. tariffs in promoting infant industries by focusing on the much heralded example of the tinplate industry. After earlier failures, the tinplate industry became established and flourished after receiving protection in the McKinley tariff of 1890. Treating the entry and exit decisions of producers as endogenous, a probability model is estimated to determine the conditions under which domestic tinplate production will take place. Counterfactual simulations indicate that, in the absence of the McKinley duties, domestic tinplate production would have arisen about a decade later as U.S. iron and steel prices (comprising three-quarters of production costs) converged with those in Britain. While the tariff accelerated the industry's development, welfare calculations suggest that protection does not pass a cost-benefit test.

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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6835.

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    Date of creation: Dec 1998
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    Publication status: published as Journal of Economic History (June 2000).
    Handle: RePEc:nbr:nberwo:6835

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    1. Harrison, Ann E, 1994. "An Empirical Test of the Infant Industry Argument: Comment," American Economic Review, American Economic Association, vol. 84(4), pages 1090-95, September.
    2. David, Paul A., 1970. "Learning By Doing and Tariff Protection: A Reconsideration of the Case of the Ante-Bellum United States Cotton Textile Industry," The Journal of Economic History, Cambridge University Press, vol. 30(03), pages 521-601, September.
    3. Williamson, Jeffrey G., 1972. "Embodiment, Disembodiment, Learning by Doing, and Returns to Scale in Nineteenth-Century Cotton Textiles," The Journal of Economic History, Cambridge University Press, vol. 32(03), pages 691-705, September.
    4. Irwin, Douglas A & Klenow, Peter J, 1994. "Learning-by-Doing Spillovers in the Semiconductor Industry," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1200-1227, December.
    5. Krueger, Anne O & Tuncer, Baran, 1982. "An Empirical Test of the Infant Industry Argument," American Economic Review, American Economic Association, vol. 72(5), pages 1142-52, December.
    6. Krueger, Anne O & Tuncer, Baran, 1984. "An Empirical Test of the Infant Industry Argument: Reply," American Economic Review, American Economic Association, vol. 74(5), pages 1112-13, December.
    7. G. R. Hawke, 1975. "The United States Tariff and Industrial Protection in the Late Nineteenth Century," Economic History Review, Economic History Society, vol. 28(1), pages 84-99, 02.
    8. Head, Keith, 1994. "Infant industry protection in the steel rail industry," Journal of International Economics, Elsevier, vol. 37(3-4), pages 141-165, November.
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    Cited by:
    1. VANDENBUSSCHE, Hylke & ZANARDI, Maurizio, . "What explains the proliferation of antidumping laws?," CORE Discussion Papers RP -2052, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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