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Protectionism and international trade: A long-run view

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  • Tullio Gregori

Abstract

This paper investigates the long-run relationship between international trade and protectionism, which is measured by a sub-component of the KOF globalization index using a standard import model with a heterogeneous balanced panel of 34 countries from 1970 to 2017. The model is tested using GDP and the Import Intensity-Adjusted Demand (IAD) as an activity variable for a performance comparison. Both specifications are estimated using recent advances in the panel autoregressive distributed lag model literature with cross-sectional dependence. The cross-sectional autoregressive distributed lag (CS-ARDL) and the cross-sectional distributed lag (CS-DL) models provide similar results. Mean group estimates show a proportional impact of IAD on international trade whilst the GDP effect is larger. The long-run protectionism elasticity is always negative and significant but less than half of the import price elasticity.

Suggested Citation

  • Tullio Gregori, 2021. "Protectionism and international trade: A long-run view," International Economics, CEPII research center, issue 165, pages 1-13.
    • Handle: RePEc:cii:cepiie:2021-q1-165-2
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    File URL: https://www.sciencedirect.com/science/article/pii/S2110701720302729
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    Cited by:

    1. Zhian Zhiow Augustinne Wong & Ramez Abubakr Badeeb & Abey P. Philip, 2023. "Financial Inclusion, Poverty, and Income Inequality in ASEAN Countries: Does Financial Innovation Matter?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 169(1), pages 471-503, September.
    2. Tatiana N. Litvinova & Nodira B. Abdusalomova & Tatiana A. Dugina & Igor V. Denisov, 2024. "Change Management Based on Smart Technologies for Sustainable Business Development," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 25(1), pages 17-30, September.

    More about this item

    Keywords

    Trade; Protectionism; Long-run elasticities; Panel distributed lags;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F69 - International Economics - - Economic Impacts of Globalization - - - Other

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