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Reconsidering the empirical evidence on the Grossman-Helpman model of endogenous protection

  • Josh Ederington
  • Jenny Minier

model of endogenous protection as the preëminent model in the political economy of trade literature has been significantly advanced by the finding that its predictions about the cross-industry pattern of protection are broadly consistent with the data. However, in their empirical implementation of the Grossman-Helpman model, researchers have assumed the presence of multiple policy instruments and extraneous political factors. We argue that incorporating these assumptions into the theory significantly changes its predictions about the cross-industry pattern of protection. JEL classification: F1

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Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 41 (2008)
Issue (Month): 2 (May)
Pages: 501-516

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Handle: RePEc:cje:issued:v:41:y:2008:i:2:p:501-516
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  1. Gardner, Grant W & Kimbrough, Kent P, 1992. "Tax Regimes, Tariff Revenues and Government Spending," Economica, London School of Economics and Political Science, vol. 59(233), pages 75-92, February.
  2. Matschke, Xenia N. & Sherlund, Shane M, 2003. "Do Labor Issues Matter In The Determination Of U.S. Trade Policy? An Empirical Reevaluation," Santa Cruz Department of Economics, Working Paper Series qt82k4x4f5, Department of Economics, UC Santa Cruz.
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  4. Imai, Susumu & Katayama, Hajime & Krishna, Kala, 2009. "Protection for sale or surge protection?," European Economic Review, Elsevier, vol. 53(6), pages 675-688, August.
  5. Kishore Gawande & Usree Bandyopadhyay, 2000. "Is Protection for Sale? Evidence on the Grossman-Helpman Theory of Endogenous Protection," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 139-152, February.
  6. Trefler, Daniel, 1993. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 138-60, February.
  7. Per G. Fredriksson & Xenia Matschke & Jenny Minier, 2008. "For Sale: Trade Policy in Majoritarian Systems," Working papers 2008-20, University of Connecticut, Department of Economics.
  8. Pincus, J J, 1975. "Pressure Groups and the Pattern of Tariffs," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 757-78, August.
  9. Xenia Matschke, 2005. "Costly Revenue-Raising and the Case for Favoring Import-Competing Industries," CESifo Working Paper Series 1502, CESifo Group Munich.
  10. Grether, Jean-Marie & de Melo, Jaime & Olarreaga, Marcelo, 2001. "Who determines Mexican trade policy?," Journal of Development Economics, Elsevier, vol. 64(2), pages 343-370, April.
  11. Keiko Kubota, 2005. "Fiscal Constraints, Collection Costs, And Trade Policies," Economics and Politics, Wiley Blackwell, vol. 17, pages 129-150, 03.
  12. Avinash Dixit, 1996. "Special-Interest Lobbying and Endogenous Commodity Taxation," Eastern Economic Journal, Eastern Economic Association, vol. 22(4), pages 375-388, Fall.
  13. Heller, Walter P & Shell, Karl, 1974. "On Optimal Taxation with Costly Administration," American Economic Review, American Economic Association, vol. 64(2), pages 338-45, May.
  14. Phillip McCalman, 2004. "Protection for Sale and Trade Liberalization: an Empirical Investigation," Review of International Economics, Wiley Blackwell, vol. 12(1), pages 81-94, 02.
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