IDEAS home Printed from https://ideas.repec.org/p/mie/wpaper/639.html

Manufacturing Fetishism: The Neo-Mercantilist Preoccupation with Protecting Manufacturing

Author

Listed:
  • Alecia Waite Cassidy

    (University of Michigan)

  • Edward Tower

    (Duke University)

  • Xiaolu Wang

    (Cornell University)

Abstract

Two common views are that a country cannot develop without a strong manufacturing base and that trade restrictions are essential to facilitate the development of that strong manufacturing base and thus spur economic growth. We ask: Does a strong manufacturing share of GDP facilitate economic growth? Do trade restrictions ensure the development of a strong manufacturing base? How can governance affect manufacturing share? And are the relationships we find robust across regions? We find the manufacturing share is not significantly correlated with a higher standard of living. Nor is it related significantly and consistently to economic growth. We also find that trade restrictions both at home and abroad shrink the manufacturing base and smother economic growth. A better way than protectionism and subsidies specific to industry to enhance economic growth is to improve governance effectiveness and the quality of regulation.

Suggested Citation

  • Alecia Waite Cassidy & Edward Tower & Xiaolu Wang, 2014. "Manufacturing Fetishism: The Neo-Mercantilist Preoccupation with Protecting Manufacturing," Working Papers 639, Research Seminar in International Economics, University of Michigan.
    • Handle: RePEc:mie:wpaper:639
    as

    Download full text from publisher

    File URL: http://www.fordschool.umich.edu/rsie/workingpapers/Papers626-650/r639.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2007. "The worldwide governance indicators project : answering the critics," Policy Research Working Paper Series 4149, The World Bank.
    2. Xuepeng Liu & Emanuel Ornelas, 2014. "Free Trade Agreements and the Consolidation of Democracy," American Economic Journal: Macroeconomics, American Economic Association, vol. 6(2), pages 29-70, April.
    3. Edward Tower & Alecia Waite, 2011. "Preoccupation with Protecting Manufacturing? Preoccupation with Protecting Manufacturing?," Working Papers 10611, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    4. Hiau Looi Kee & Alessandro Nicita & Marcelo Olarreaga, 2008. "Import Demand Elasticities and Trade Distortions," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 666-682, November.
    5. William Kaempfer & Edward Tower, 1982. "The balance of payments approach to trade tax symmetry theorems," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 118(1), pages 148-165, March.
    6. Michele Boldrin & David K. Levine, 2013. "The Case against Patents," Journal of Economic Perspectives, American Economic Association, vol. 27(1), pages 3-22, Winter.
    7. Michael Pettis, 2013. "The Great Rebalancing: Trade, Conflict, and the Perilous Road Ahead for the World Economy," Economics Books, Princeton University Press, edition 1, volume 1, number 9936, December.
    8. repec:bla:devpol:v:27:y:2009:i:5:p:483-502 is not listed on IDEAS
    9. Copeland, Brian R & Tower, Edward & Webb, Michael A, 1989. "On Negotiated Quotas, Tariffs, and Transfers," Oxford Economic Papers, Oxford University Press, vol. 41(4), pages 774-788, October.
    10. Mussa, Michael, 1993. "Making the Practical Case for Freer Trade," American Economic Review, American Economic Association, vol. 83(2), pages 372-376, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sébastien Jean & David Laborde & Will Martin, 2008. "Choosing Sensitive Agricultural Products in Trade Negotiations," Working Papers 2008-18, CEPII research center.
    2. Geoffrey Barrows & Hélène Ollivier & Ariell Reshef, 2023. "Production Function Estimation with Multi-Destination Firms," CESifo Working Paper Series 10716, CESifo.
    3. Raza, Werner G., 2021. "COVID-19 and the failure of pharmaceutical innovation for the global South: The example of "neglected diseases" and emerging infectious diseases," Briefing Papers 32a, Austrian Foundation for Development Research (ÖFSE).
    4. repec:osf:socarx:qzmf8_v1 is not listed on IDEAS
    5. Antoine Bouët & Aziz Elbehri & Duc Bao Nguyen & Fousseini Traoré, 2022. "Measuring Agricultural Trade Integration in Southeast Asia," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 37(2), pages 235-266.
    6. Archibugi, Daniele & Mariella, Vitantonio & Vezzani, Antonio, 2025. "What next? Nations in the technological race through the 2030," Technological Forecasting and Social Change, Elsevier, vol. 212(C).
    7. Emanuel Ornelas, 2025. "Political Competition and the Strategic Adoption of Free Trade Agreements," Review of International Economics, Wiley Blackwell, vol. 33(2), pages 380-392, May.
    8. Kazunobu Hayakawa & Naoto Jinji & Nuttawut Laksanapanyakul & Toshiyuki Matsuura & Taiyo Yoshimi, 2023. "Quantifying the costs of utilising regional trade agreements," The World Economy, Wiley Blackwell, vol. 46(12), pages 3542-3570, December.
    9. Christian A Belabed & Thomas Theobald & Till van Treeck, 2018. "Income distribution and current account imbalances [Notes on capacity utilisation, distribution and accumulation]," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 42(1), pages 47-94.
    10. Mahdi Ghodsi & Robert Stehrer, 2022. "Trade policy and global value chains: tariffs versus non-tariff measures," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(3), pages 887-916, August.
    11. Omar Jraid Mustafa Alhanaqtah & Veronika Vladimir Alexey Alhanaqtah, 2018. "Governance Indicators for Strategic Business Decisions: Diversity of Western Asian Countries in Terms of Democracy," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 8(3), pages 378-393, March.
    12. Christopher R. Knittel & Konstantinos Metaxoglou & Anson Soderbery & André Trindade, 2022. "Exporting global warming? Coal trade and the shale gas boom," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(3), pages 1294-1333, August.
    13. Kazunobu HAYAKAWA & Naoto JINJI & Toshiyuki MATSUURA & Taiyo YOSHIMI, 2019. "Costs of Utilizing Regional Trade Agreements," Discussion papers 19054, Research Institute of Economy, Trade and Industry (RIETI).
    14. Shamugia, Egnate, 2025. "Rule of law and economic performance: A meta-regression analysis," European Journal of Political Economy, Elsevier, vol. 87(C).
    15. Lake, James & Linask, Maia K., 2016. "Could tariffs be pro-cyclical?," Journal of International Economics, Elsevier, vol. 103(C), pages 124-146.
    16. Julian Hinz, 2023. "The ties that bind: geopolitical motivations for economic integration," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 159(1), pages 51-100, February.
    17. Joel Blit & Mauricio Zelaya, 2015. "Do Firms Respond to Stronger Patent Protection by Doing More R&D?," Working Papers 1501, University of Waterloo, Department of Economics, revised Aug 2015.
    18. Costinot, Arnaud & Rodríguez-Clare, Andrés, 2014. "Trade Theory with Numbers: Quantifying the Consequences of Globalization," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 197-261, Elsevier.
    19. Khurshid Djalilov & Jens Hölscher, 2016. "Comparative Analyses Of The Banking Environment In Transition Countries," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 61(208), pages 7-26, January -.
    20. Norbäck Pehr-Johan & Persson Lars & Olofsson Charlotta, 2020. "Acquisitions for Sleep," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(2), pages 1-13, April.
    21. Leudjou, Roland R., . "The Doha Round and Food Security in the Dairy Sector in Cameroon: A Global Simulation Model (GSIM) Approach," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 13(01), pages 1-16.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mie:wpaper:639. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSA Webmaster (email available below). General contact details of provider: https://edirc.repec.org/data/riumius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.