The Infant Industry Argument: Tariffs, NTMs and Innovation

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Title: The Infant Industry Argument: Tariffs, NTMs and Innovation
Authors: Bagayev, Igor
Davies, Ronald B.
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Date: Jan-2017
Abstract: One rationale for the infant industry argument is that, by protecting domestic firms from foreign competition, this increases rents and investment in innovation and other growth enhancing measures. Using data on 4,750 firms across 13 developing countries, we examine whether protection via tariffs or non-tariff measures (SPS and TBT specifically) increase innovation in either products or processes. We find no such evidence; instead we find a small negative impact of protection, particularly tariffs and TBTs, on innovation.
Funding Details: European Commission - Seventh Framework Programme (FP7)
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Keywords: Non-tariff measuresTechnical barriers to tradeInnovationInfant industry
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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