Protection for Sale with Imperfect Rent Capturing
نویسندگان
چکیده
We extend the protection for sale framework by modelling non tariff barriers. Explicitly introducing partial rent capturing leads to a testable specification that bridges the gap between the theoretical Grossman and Helpman (1994) model and its empirical implementation, where coverage ratios have been used to measure protection. Our econometric analysis supports the augmented specification and leads to more realistic estimates for the structural parameters of the model. JEL classification: F13 ∗We are grateful to Rob Feenstra whose questions prompted this research, to Kishore Gawande for providing us with the data, and to Geert Dhaene for help with the estimation. The usual caveat applies: All remaining errors are ours.
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