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Protección y productividad: Causas y consecuencias de aislar sectores en una economía pequeña

  • Cecilia Durán

    ()

    (Asesoría Política y Comercial, Ministerio de Economía y Finanzas, Uruguay.)

  • Natalia Ferreira-Coimbra

    ()

    (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

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    This paper aims to identify the productive sectors that can be isolated from international competition, analyzing the impact on productivity arising from a trade liberalization process. We focused on the case of Uruguay and select a basket of goods that show signs of not being competitive on a non-national scale and, at the same time, have a protection tool that takes the form of non-tariff barriers. In turn, we analyze the effects of protection on sector productivity through a difference-in-difference approach, finding that domestic protection in a context of economic liberalization has a negative impact on firms' productivity. Finally, a quick analysis from the political economy reveals that there are winners and losers in the process of trade liberalization. This makes the exclusion of sensitive sectors a viable mechanism for an opening that otherwise would not be a political equilibrium.

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    File URL: http://www.fcs.edu.uy/archivos/2810.pdf
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    Paper provided by Department of Economics - dECON in its series Documentos de Trabajo (working papers) with number 2810.

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    Length: 52 pages
    Date of creation: Dec 2010
    Date of revision:
    Handle: RePEc:ude:wpaper:2810
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    Web page: http://www.fcs.edu.uy/subcategoria.php?SubCatId=48&CatId=53
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    1. Julio Berlinsky (coordinador) & Honório Kume (coordinador) & Marcel Vaillant (coordinador) & Guida Piani & Álvaro Ons & Pedro Miranda & Carlos Romero & Red MERCOSUR, 2006. "Hacia una política comercial común del MERCOSUR," Serie Red MERCOSUR, Red Mercosur, edition 1, volume 1, number 5 edited by Red MERCOSUR, Autumn.
    2. Grossman, G.M. & Helpman, E., 1993. "The Politics of Free Trade Agreements," Papers 14-93, Tel Aviv.
    3. Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers 827, C.E.P.R. Discussion Papers.
    4. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Wiley Blackwell, vol. 70(2), pages 317-341, 04.
    5. Sourafel Girma & David Greenaway & Richard Kneller, 2004. "Does Exporting Increase Productivity? A Microeconometric Analysis of Matched Firms," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 855-866, November.
    6. Rodrik, Dani, 1995. "Political economy of trade policy," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 28, pages 1457-1494 Elsevier.
    7. Olarreaga, Marcelo & Soloaga, Isidro, 1998. "Endogenous Tariff Formation: The Case of Mercosur," CEPR Discussion Papers 1848, C.E.P.R. Discussion Papers.
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