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Capital Imports and Tariffs

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  • Masao Oda

Abstract

This paper develops a three‐sector, three‐factor specific factor model with a tariff and presents conditions under which capital imports and tariffs can be welfare enhancing in a developing country. The impact on welfare depends on the tariff revenue effect and the repatriation effect. A capital import is welfare enhancing if it reduces the domestic output of imports. A tariff is welfare enhancing only if it reduces the return to foreign capital.

Suggested Citation

  • Masao Oda, 2008. "Capital Imports and Tariffs," Review of International Economics, Wiley Blackwell, vol. 16(2), pages 350-354, May.
  • Handle: RePEc:bla:reviec:v:16:y:2008:i:2:p:350-354
    DOI: 10.1111/j.1467-9396.2007.00715.x
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    Cited by:

    1. Chi-Chur Chao & Eden S. H. Yu, 2014. "Capital and Consumption Tax Reforms in a Small Open Economy," Review of International Economics, Wiley Blackwell, vol. 22(1), pages 1-12, February.

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