A Quantile-Based Test of Protection for Sale Model

38 Pages Posted: 21 Mar 2008 Last revised: 26 Jun 2010

See all articles by Susumu Imai

Susumu Imai

Queen's University - Department of Economics

Hajime Katayama

Waseda University - School of Commerce

Kala Krishna

Pennsylvania State University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: March 2008

Abstract

This paper proposes a new test of the Protection for Sale (PFS) model by Grossman and Helpman (1994). Unlike existing methods in the literature, our approach does not require any data on political organizations. We formally show that the PFS model predicts that the quantile regression of the protection measure on the inverse import penetration ratio divided by the import demand elasticity, should yield a positive coefficient for quantiles close to one. We test this prediction using the data from Gawande and Bandyopadhyay (2000). The results do not provide any evidence favoring the PFS model.

Suggested Citation

Imai, Susumu and Katayama, Hajime and Krishna, Kala, A Quantile-Based Test of Protection for Sale Model (March 2008). NBER Working Paper No. w13900, Available at SSRN: https://ssrn.com/abstract=1112012

Susumu Imai

Queen's University - Department of Economics ( email )

99 University Avenue
Kingston K7L 3N6, Ontario
Canada

HOME PAGE: http://qed.econ.queensu.ca/pub/faculty/imai/

Hajime Katayama

Waseda University - School of Commerce ( email )

School of Commerce, Waseda University
1-6-1 Nishi-Waseda Shinjyuku-ku
Tokyo, Tokyo 169 - 8050
Japan

Kala Krishna (Contact Author)

Pennsylvania State University - Department of Economics ( email )

523 Kern Graduate Building
University Park, PA 16802-3306
United States
814-865-1106 (Phone)
814-863-4775 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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