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Technology Adoption under Price Undertakings

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  • Greetje Everaert

Abstract

Economists most often analyse the effects of protectionist or antidumping policies in the context of tariffs or voluntary export restraints - the latter are very similar to quotas in fact. Antidumping policies in the European Union however make frequent use of price undertakings. Whereas the effects of tariff and quota protection on technology adoption have been demonstrated by Miyagiwa and Ohno (1995), no such analysis has been carried out for price undertakings. In contrast to previous analysis, this article shows that adoption of new technologies is always delayed under a regime of price undertakings, as compared to the case of free trade, and that this doesn't depend on whether protection is temporary or permanent. Thus, our results challenge some of the conclusions of Miyagiwa and Ohno (1995) and put further doubt on the infant-industry argument for protection. We further analyse the sensitivity of the timing of technology adoption to the instrument of protection and formulate policy recommendations on the basis of this analysis.

Suggested Citation

  • Greetje Everaert, 2003. "Technology Adoption under Price Undertakings," LICOS Discussion Papers 13703, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  • Handle: RePEc:lic:licosd:13703
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    File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp137.pdf
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    References listed on IDEAS

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    1. Dermot Leahy & J. Peter Neary, 1999. "Learning by Doing, Precommitment and Infant-Industry Promotion," Review of Economic Studies, Oxford University Press, vol. 66(2), pages 447-474.
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    3. Miyagiwa, Kaz & Ohno, Yuka, 1995. "Closing the Technology Gap under Protection," American Economic Review, American Economic Association, vol. 85(4), pages 755-770, September.
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    Cited by:

    1. Everaert, Greetje M.M., 2004. "The political economy of restructuring and subsidisation : an international perspective," BOFIT Discussion Papers 12/2004, Bank of Finland, Institute for Economies in Transition.

    More about this item

    Keywords

    Trade protection; Antidumping; Technology adoption; Price Undertaking;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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