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Protection versus Promotion: An Empirical Investigation

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  • Devashish Mitra
  • Dimitrios D. Thomakos
  • Mehmet A. Ulubaşoğlu

Abstract

Using Turkish industry‐level data from 1983 to 1990, we find that politically organized industries receive both higher protection and promotion than unorganized ones. Tariff rates are decreasing (increasing) in the import‐penetration ratio and the absolute value of the import‐demandelasticity for organized (unorganized) industries. Subsidy rates are decreasing (increasing) in the output‐supply elasticity for organized (unorganized) industries. The results are consistent with the predictions of the Grossman–Helpman model and its extension in this paper. The mix of protection and promotion is inversely related to the ratio of their respective marginal deadweight cost measures.

Suggested Citation

  • Devashish Mitra & Dimitrios D. Thomakos & Mehmet A. Ulubaşoğlu, 2004. "Protection versus Promotion: An Empirical Investigation," Economics and Politics, Wiley Blackwell, vol. 16(2), pages 147-162, July.
    • Handle: RePEc:bla:ecopol:v:16:y:2004:i:2:p:147-162
    DOI: 10.1111/j.1468-0343.2004.00135.x
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    Cited by:

    1. Francois, Joseph & Nelson, Douglas R., 2014. "Political support for trade policy in the European Union," European Journal of Political Economy, Elsevier, vol. 36(C), pages 243-253.
    2. Francois, Joseph & Nelson, Douglas & Pelkmans-Balaoing, Annette, 2008. "Endogenous Protection in General Equilibrium: Estimating Political Weights in the EU," CEPR Discussion Papers 6979, C.E.P.R. Discussion Papers.

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    JEL classification:

    • F0 - International Economics - - General
    • F6 - International Economics - - Economic Impacts of Globalization

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