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An Example of Innovation-Inducing Tariff Protection

In: Analytical Issues in Trade, Development and Finance

Author

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  • Swapnendu Banerjee

    (Jadavpur University)

Abstract

This chapter illustrates how in a vertically differentiated domestic market with two types of consumers, tariff protection raises the incentive for quality innovation by a domestic monopolist. Similar in spirit to the Schumpeterian idea, this result is in sharp contrast to the oft-quoted argument that trade liberalization is conducive to quality innovation.

Suggested Citation

  • Swapnendu Banerjee, 2014. "An Example of Innovation-Inducing Tariff Protection," India Studies in Business and Economics, in: Ambar Nath Ghosh & Asim K. Karmakar (ed.), Analytical Issues in Trade, Development and Finance, edition 127, chapter 4, pages 63-71, Springer.
    • Handle: RePEc:spr:isbchp:978-81-322-1650-6_4
    DOI: 10.1007/978-81-322-1650-6_4
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    Cited by:

    1. Naveed, Amjad & Wang, Cong, 2023. "Innovation and labour productivity growth moderated by structural change: Analysis in a global perspective," Technovation, Elsevier, vol. 119(C).

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