Trade policy with endogenous entry revisited

Kala Krishna, Ling Hui Tan

Research output: Contribution to journalArticle

1 Scopus citations

Abstract

This paper revisits the effects of tariffs and quotas in a competitive setting where three results are thought to hold. These are: that quotas are equivalent to specific tariffs, the form of tariffs-specific or ad valorem-does not matter, and that the way in which a quota is allocated has no real effects as it only affects the allocation of rents, not their size. We show that all three of these results are false when entry/exit is endogenous. Equivalence holds only if the initial level of entry is set at the long-run level under the quota.

Original languageEnglish (US)
Pages (from-to)271-279
Number of pages9
JournalJournal of International Economics
Volume80
Issue number2
DOIs
StatePublished - Mar 1 2010

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

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