Trade Barriers and Trade Flows Across Countries and Industries

34 Pages Posted: 14 Aug 2007 Last revised: 12 Sep 2022

See all articles by Jong W. Lee

Jong W. Lee

affiliation not provided to SSRN

Phillip Swagel

Northwestern University - Department of Economics; International Monetary Fund (IMF)

Date Written: July 1994

Abstract

We use disaggregated data on trade flows, production, and trade barriers for 41 countries in 1988 to examine the political and economic determinants of non-tariff barriers, as well as the impact of protection (both tariff and non-tariff) on trade flows. We use an econometric framework that allows for the simultaneous determination of trade barriers and trade flows. Our results are consistent with political-economy theories of the determinants of protection: even after accounting for industry-specific factors, nations tend to protect industries that are weak, in decline, and threatened by import competition. Countries also give more protection to large industries; these might be thought of as politically important. Nations use tariffs, non-tariff barriers, and exchange rate controls as complementary instruments of protection.

Suggested Citation

Lee, Jong W. and Swagel, Phillip, Trade Barriers and Trade Flows Across Countries and Industries (July 1994). NBER Working Paper No. w4799, Available at SSRN: https://ssrn.com/abstract=484032

Jong W. Lee (Contact Author)

affiliation not provided to SSRN

Phillip Swagel

Northwestern University - Department of Economics ( email )

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