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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/25992
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| Title: | | Substitutability and protectionism: Latin America's trade policy and imports from China and India  |
| Authors: | | Facchini, Giovanni Olarreaga, Marcelo Silva, Peri Willmann, Gerald |
| Issue Date: | | 2007 |
| Series/Report no.: | | CESifo working paper 1947 |
| Abstract: | | This paper examines the trade policy response of Latin American governments to the rapid growth of China and India in world markets. To explain higher protection in sectors where a large share is imported from these countries, we extend the protection for sale model to allow for different degrees of substitutability between domestically produced and imported varieties. The extension suggests that higher levels of protection towards Chinese goods can be explained by high substitutability between domestically produced goods and Chinese goods, whereas lower levels of protection towards goods imported from India can be explained by low substitutability with domestically produced goods. The data supports the extension to the protection for sale model, which performs better than the original specification in terms of explaining Latin America's structure of protection. |
| Subjects: | | Latin America protectionism |
| JEL: | | F10 F11 F13 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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