Optimal Tariffs, Tariff Jumping, and Heterogeneous Firms PDF Download
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Author: Matthew T. Cole
Publisher:
ISBN:
Category : Investments, Foreign
Languages : en
Pages : 35
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Author: Matthew T. Cole
Publisher:
ISBN:
Category : Investments, Foreign
Languages : en
Pages : 35
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Book Description
Author: Ziran Ding
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 156
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Book Description
The overarching theme of this dissertation is the analysis of trade policy implication in the presence of firm heterogeneity, variable markups, and multinational production. Chapter 1 surveys the main ingredients and results of heterogeneous firms trade policy literature that has been developing since the early 2000s. First, I present in great detail various stylized facts regarding firm heterogeneity, firm-level markups, and the global structure of multinational production. Second, I summarize the results of the recent development of theoretical approaches of modeling the firm-level markups. Third, I discuss the theoretical frameworks that incorporates multinational production into heterogeneous firms framework. Fourth, I review the trade policy literature that features firm heterogeneity, variable markups, and multinational production. Finally, I highlight the contribution of this dissertation and discuss directions for future research. Chapter 2 introduces ad valorem tariff and horizontal FDI into the Melitz and Ottaviano [2008] framework, producing the first framework in the trade policy literature that incor- porates firm heterogeneity, variable markups, and multinational production. The model generates novel equilibrium implications. First, the presence of multinational production generates a competitive effect on the economy, and firms need to be more productive to survive the competition. Second, the ad valorem tariff and quadratic quasi-linear preference collectively result in an endogenous level of firm entry. Therefore, the impact of trade/tariff liberalization depends on the equilibrium number of firms. In the short-run, when the firm entry is prohibited, an increase in import tariff shields the domestic economy from the For- eign competition, making it easier for firms to survive. This result is overturned when firms can enter the market freely in the long-run. In the long-run, an increase in Home's import tariff will make the Home country a more desirable environment to do business, attracting more entrants in the Home market, making the Home market more competitive. Firms need to be more productive to survive. Home0́9s tariff increase also makes it harder for the least productive Foreign exporters to survive, and triggers tariff-jumping FDI among the most productive exporters. Markups also respond to tariff change differently in the short-run vs. long-run, primarily due to the change of competitive environment associated with firm entry. Chapter 3 studies the welfare implication of tariff and optimal tariffs in an environment features firm heterogeneity, variable markups and FDI. The findings can be broadly sum- marized in three aspects. First, the quadratic quasi-linear preference generates multiple externalities in this economy, causing market outcome to differ from the socially optimum outcome systematically. Permitting FDI lowers the domestic cutoff levels and reduces the misallocation in the economy. Second, free trade is not always socially optimal. If the do- mestic cutoff is sufficiently high, an additional firm entry can improve social welfare. In this case, a positive import tariff is welfare-improving because it encourages firm entry. Third, both positively and normatively, the interaction of variable markup and FDI generates novel trade policy insights that are absent if consumers possess CES preference.
Author: Ziran Ding
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Jan I. Haaland
Publisher:
ISBN:
Category : Commercial policy
Languages : en
Pages : 23
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This paper derives optimal trade and domestic taxes for a small open economy containing a monopolistically competitive (MC) sector in which firms may have heterogeneous productivity levels. Domestic protection brings gains from expanding the number of product varieties on offer, but these gains (and the corresponding rates of domestic subsidy or of import tariffs) are reduced by heterogeneity of foreign exporters who may withdraw from the market. Our analysis encompasses special cases in which the domestic MC sector can expand or contract flexibly, or is of fixed size. In the latter case gains from protection arise from terms of trade effects and, since various margins of substitution are switched off, only the relative values of domestic taxes, import tariffs and export taxes matter.
Author: Lorenzo Caliendo
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
We derive a new formula for the optimal uniform tariff in a small-country, heterogeneous-firm model with roundabout production and a nontraded good. Tariffs are applied on imported intermediate inputs. First-best policy requires that markups on domestic intermediate inputs are offset by subsidies. In a second-best setting where such subsidies are not used, the double- marginalization of domestic markups creates a strong incentive to lower the optimal tariff on imported inputs. In a 186-country quantitative model, the median optimal tariff is 10%, and negative for five countries, as compared to 27% in manufacturing from the one-sector, optimal tariff formula without roundabout production.
Author: Anthony J. Venables
Publisher:
ISBN:
Category :
Languages : en
Pages : 23
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Author:
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Category :
Languages : en
Pages :
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Author: Rishi Sharma
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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This paper shows that an importing country can have an incentive to impose a tariff to extract rents earned by foreign exporters even in a perfectly competitive setting. To demonstrate this, I develop a new model of international trade that incorporates fixed costs of exporting and firm heterogeneity within a perfectly competitive framework. In this setting, despite the fact that there are no preexisting distortions, the optimal tariff is positive even for a small country with no world market power. In the limit, as either firm heterogeneity or the fixed costs of exporting vanish, the optimal tariff approaches zero.
Author: Marc Bacchetta
Publisher:
ISBN: 9789287038128
Category : Political Science
Languages : en
Pages : 0
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Book Description
Trade flows and trade policies need to be properly quantified to describe, compare, or follow the evolution of policies between sectors or countries or over time. This is essential to ensure that policy choices are made with an appropriate knowledge of the real conditions. This practical guide introduces the main techniques of trade and trade policy data analysis. It shows how to develop the main indexes used to analyze trade flows, tariff structures, and non-tariff measures. It presents the databases needed to construct these indexes as well as the challenges faced in collecting and processing these data, such as measurement errors or aggregation bias. Written by experts with practical experience in the field, A Practical Guide to Trade Policy Analysis has been developed to contribute to enhance developing countries' capacity to analyze and implement trade policy. It offers a hands-on introduction on how to estimate the distributional effects of trade policies on welfare, in particular on inequality and poverty. The guide is aimed at government experts engaged in trade negotiations, as well as students and researchers involved in trade-related study or research. An accompanying DVD contains data sets and program command files required for the exercises. Copublished by the WTO and the United Nations Conference on Trade and Development
Author:
Publisher: ScholarlyEditions
ISBN: 1464990727
Category : Business & Economics
Languages : en
Pages : 2231
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Book Description
Economics—Advances in Research and Application: 2012 Edition is a ScholarlyEditions™ eBook that delivers timely, authoritative, and comprehensive information about Economics. The editors have built Economics—Advances in Research and Application: 2012 Edition on the vast information databases of ScholarlyNews.™ You can expect the information about Economics in this eBook to be deeper than what you can access anywhere else, as well as consistently reliable, authoritative, informed, and relevant. The content of Economics—Advances in Research and Application: 2012 Edition has been produced by the world’s leading scientists, engineers, analysts, research institutions, and companies. All of the content is from peer-reviewed sources, and all of it is written, assembled, and edited by the editors at ScholarlyEditions™ and available exclusively from us. You now have a source you can cite with authority, confidence, and credibility. More information is available at http://www.ScholarlyEditions.com/.
