Protection Versus Promotion: An Empirical Investigation

16 Pages Posted: 22 Jul 2004

See all articles by Devashish Mitra

Devashish Mitra

Syracuse University - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Mehmet Ali Ulubasoglu

Deakin University - School of Accounting, Economics and Finance

Thomakos D. Dimitrios

Florida International University (FIU) - Department of Economics; University of Peloponnese

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-demand-elasticity 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.

Suggested Citation

Mitra, Devashish and Ulubasoglu, Mehmet Ali and Dimitrios, Thomakos D., Protection Versus Promotion: An Empirical Investigation. Available at SSRN: https://ssrn.com/abstract=565071

Devashish Mitra (Contact Author)

Syracuse University - Department of Economics ( email )

The Maxwell School of Citizenship & Public Affairs
133 Eggers Hall
Syracuse, NY 13244-1020
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Mehmet Ali Ulubasoglu

Deakin University - School of Accounting, Economics and Finance ( email )

Burwood, Victoria 3215
Australia
+61 3 9244 6592 (Phone)

Thomakos D. Dimitrios

Florida International University (FIU) - Department of Economics ( email )

Miami, FL 33199
United States

University of Peloponnese

Tripolis, 22100
Greece

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