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| Author: | Kabiraj, T. Marjit, S. |
| Title: | Protecting consumers through protection: The role of tariff-induced technology transfer |
| Journal: | European Economic Review
2003 : FEB, VOL. 47:1, p. 113-124 |
| Index terms: | Technology transfer Tariffs Consumers Welfare Models |
| Language: | eng |
| Abstract: | This paper considers a duopolistic trade model where a tariff induces the foreign firm to transfer its superiour technology to the domestic rival. Contrary to the conventional wisdom, such a tariff raises consumers' surplus relative to the free trade situation. The paper characterizes the optimal tariff with and without precommitment on the part of the local government. Possibility of technology transfer reduces the optimal tariff rate compared to the no-transfer situation. |
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