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Protectionist Reputations and the Threat of Voluntary Export Restraint

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  • Jans, Ivette
  • Wall, Howard J
  • Hariharan, Govind

Abstract

Voluntary export restraints are often administered in such a way that each firm's post-VER output allocation is positively related to its output under free trade. When this is true, a credible threat of a future VER will induce foreign firms to dump in the current period, decreasing the domestic price (the Yano effect), and possibly increasing welfare. We show that if an importing government's preferences are private information and if the government makes a series of VER decisions, there may exist an incentive for a welfare-maximizing government that normally prefers free trade to maintain a protectionist reputation by imposing a VER. Copyright 1995 by Blackwell Publishing Ltd.

Suggested Citation

  • Jans, Ivette & Wall, Howard J & Hariharan, Govind, 1995. "Protectionist Reputations and the Threat of Voluntary Export Restraint," Review of International Economics, Wiley Blackwell, vol. 3(2), pages 199-208, June.
  • Handle: RePEc:bla:reviec:v:3:y:1995:i:2:p:199-208
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    Cited by:

    1. Baylis, Katherine R., 2003. "Dispatches From The Tomato Wars: The Spillover Effects Of Trade Barriers," 2003 Annual meeting, July 27-30, Montreal, Canada 22120, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Baylis, Katherine R., 2003. "Dispatches From The Tomato Wars: Spillover Effects Of Trade Barriers," Working Papers 15850, University of British Columbia, Food and Resource Economics.

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