Protection versus Promotion: An Empirical Investigation

Authors: Mitra D.¹; Thomakos D.D.²; Uluba scedil o gbreve lu M.A.³

Source: Economics and Politics, Volume 16, Number 2, July 2004 , pp. 147-162(16)

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Abstract:

Using Turkish industry-level data from 1983 to 1990, we find that politically organized industries receive both higher protection and promotion than unorganized ones. Tariff rates are decreasing (increasing) in the import-penetration ratio and the absolute value of the import-demandelasticity for organized (unorganized) industries. Subsidy rates are decreasing (increasing) in the output-supply elasticity for organized (unorganized) industries. The results are consistent with the predictions of the Grossman–Helpman model and its extension in this paper. The mix of protection and promotion is inversely related to the ratio of their respective marginal deadweight cost measures.

Document Type: Research article

DOI: http://dx.doi.org/10.1111/j.1468-0343.2004.00135.x

Affiliations: 1: Syracuse University and NBER 2: Florida International University and University of Peloponnese, Greece 3: Deakin University, Australia

Publication date: 2004-07-01