Trade policy with endogenous entry revisited

Kala Krishna, Ling Hui Tan

Research output: Contribution to journalArticle

1 Citation (Scopus)

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

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Trade policy
Endogenous entry
Tariffs
Equivalence
Rent
Exit

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

Cite this

Krishna, Kala ; Tan, Ling Hui. / Trade policy with endogenous entry revisited. In: Journal of International Economics. 2010 ; Vol. 80, No. 2. pp. 271-279.
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Trade policy with endogenous entry revisited. / Krishna, Kala; Tan, Ling Hui.

In: Journal of International Economics, Vol. 80, No. 2, 01.03.2010, p. 271-279.

Research output: Contribution to journalArticle

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