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Trade Barriers and Trade Flows across Countries and Industries

  • Jong-Wha Lee
  • Phillip Swagel

We use disaggregated data on trade flows, production, and trade barriers for 41 countries in 1988 to examine the political and economic determinants of non-tariff barriers, as well as the impact of protection (both tariff and non-tariff) on trade flows. We use an econometric framework that allows for the simultaneous determination of trade barriers and trade flows. Our results are consistent with political-economy theories of the determinants of protection: even after accounting for industry-specific factors, nations tend to protect industries that are weak, in decline, and threatened by import competition. Countries also give more protection to large industries; these might be thought of as politically important. Nations use tariffs, non-tariff barriers, and exchange rate controls as complementary instruments of protection.

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File URL: http://www.nber.org/papers/w4799.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4799.

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Date of creation: Jul 1994
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Publication status: published as Review of Economics and Statistics, Vol. 79, no. 3 (August 1997): 372-382.
Handle: RePEc:nbr:nberwo:4799
Note: ITI
Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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Web page: http://www.nber.org
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  1. Flam, Harry & Helpman, Elhanan, 1987. "Industrial policy under monopolistic competition," Journal of International Economics, Elsevier, vol. 22(1-2), pages 79-102, February.
  2. Ellingsen, T. & Warneryd, K., 1993. "Foreign Direct Investment and Political Economy of Protection," Papers 9308, Tilburg - Center for Economic Research.
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  7. Magee,Stephen P. & Brock,William A. & Young,Leslie, 1989. "Black Hole Tariffs and Endogenous Policy Theory," Cambridge Books, Cambridge University Press, number 9780521362474.
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  10. Douglas A. Irwin, 1994. "Trade Politics and the Semi-conductor Industry," University of Chicago - George G. Stigler Center for Study of Economy and State 92, Chicago - Center for Study of Economy and State.
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  12. Cassing, James H & Hillman, Arye L, 1986. "Shifting Comparative Advantage and Senescent Industry Collapse," American Economic Review, American Economic Association, vol. 76(3), pages 516-23, June.
  13. Nelson, Forrest & Olson, Lawrence, 1978. "Specification and Estimation of a Simultaneous-Equation Model with Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(3), pages 695-709, October.
  14. Douglas A. Irwin, 1996. "Trade Policies and the Semiconductor Industry," NBER Chapters, in: The Political Economy of American Trade Policy, pages 11-72 National Bureau of Economic Research, Inc.
  15. Cassing, James H. & Hillman, Arye L., 1985. "Political influence motives and the choice between tariffs and quotas," Journal of International Economics, Elsevier, vol. 19(3-4), pages 279-290, November.
  16. Robert E. Baldwin, 1982. "The Political Economy of Protectionism," NBER Chapters, in: Import Competition and Response, pages 263-292 National Bureau of Economic Research, Inc.
  17. Marvel, Howard P & Ray, Edward J, 1983. "The Kennedy Round: Evidence on the Regulation of International Trade in the United States," American Economic Review, American Economic Association, vol. 73(1), pages 190-97, March.
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