Protection for Sale in the EU

32 Pages Posted: 13 Mar 2007

See all articles by Marianna Belloc

Marianna Belloc

Sapienza University of Rome - Department of Economics

Date Written: March 6, 2007

Abstract

This paper presents estimation of the Grossman-Helpman (1994) model for the EU. We try to address a number of pitfalls that surround the previous empirical literature. First, we suggest a new identification strategy that enables to single out politically organized sectors with specific regard to trade policy. Second, we utilize two alternative measures of trade protection (ad-valorem equivalent of non-tariff barriers and overall restrictiveness) and adopt industrial and trade data at a high level of disaggregation. Finally, we directly obtain the structural coefficients of the model by estimating a nonlinear simultaneous equations system that is tightly linked to theory. We find that the theoretical model is broadly consistent with data and conclusions turn out internally coherent.

Keywords: Trade policy; European Union; Lobbying; Political economy; Simultaneous Equations Models

JEL Classification: F13; F15; D71; D72; C31

Suggested Citation

Belloc, Marianna, Protection for Sale in the EU (March 6, 2007). Available at SSRN: https://ssrn.com/abstract=969378 or http://dx.doi.org/10.2139/ssrn.969378

Marianna Belloc (Contact Author)

Sapienza University of Rome - Department of Economics ( email )

Via del Castro Laurenziano 9
Rome, 00161
Italy

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