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Title:Costly revenue-raising and the case for favoring import-competing industries PDF Logo
Authors:Matschke, Xenia
Issue Date:2005
Series/Report no.:CESifo working papers 1502
Abstract:A standard finding in the political economy of trade policy literature is that we should expect export-oriented industries to attract more assistance than import-competing industries. In reality, however, trade policy is heavily biased toward supporting import industries. This paper shows within a standard protection for sale framework, how the costliness of raising revenue via taxation may make export subsidies less desirable and import tariffs more desirable. The model is then estimated and its predictions are tested using U.S. tariff data. An empirical estimate of the costliness of revenue-raising is also obtained.
Subjects:protection for sale
tariffs
trade protection
JEL:F16
F13
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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