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Testing Protection For Sale In The Food Industries

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  • Lopez, Rigoberto A.
  • Hathie, Ibrahima

Abstract

This paper tests the Grossman-Helpman Protection for Sale model using panel data from U.S. food processing industries with endogenous protection, import penetration, and political campaign. The results support the key predictions of the model: organized industries are granted higher protection that decreases with import penetration and the price elasticity of imports. Furthermore, the presence of import quotas raises the level of protection substantially. The estimated weight on aggregate welfare is strikingly similar those found by Goldberg and Maggi (1999) and Gawande and Bandopadhyay (2000), implying that protection is not for sale in these industries.

Suggested Citation

  • Lopez, Rigoberto A. & Hathie, Ibrahima, 2002. "Testing Protection For Sale In The Food Industries," 2002 Annual meeting, July 28-31, Long Beach, CA 19682, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea02:19682
    DOI: 10.22004/ag.econ.19682
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    References listed on IDEAS

    as
    1. Kishore Gawande & Usree Bandyopadhyay, 2000. "Is Protection for Sale? Evidence on the Grossman-Helpman Theory of Endogenous Protection," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 139-152, February.
    2. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    3. Trefler, Daniel, 1993. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 138-160, February.
    4. repec:bla:ecorec:v:56:y:1980:i:153:p:132-44 is not listed on IDEAS
    5. Devashish Mitra, 2016. "Endogenous Lobby Formation and Endogenous Protection: A Long-Run Model of Trade Policy Determination," World Scientific Book Chapters, in: The Political Economy of Trade Policy Theory, Evidence and Applications, chapter 1, pages 3-21, World Scientific Publishing Co. Pte. Ltd..
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    8. Kym Anderson, 1980. "The Political Market for Government Assistance to Australian Manufacturing Industries," The Economic Record, The Economic Society of Australia, vol. 56(153), pages 132-144, June.
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    10. Reinert, Kenneth A. & Roland-Holst, David W., 1992. "Armington elasticities for United States manufacturing sectors," Journal of Policy Modeling, Elsevier, vol. 14(5), pages 631-639, October.
    11. Giovanni Maggi & Pinelopi Koujianou Goldberg, 1999. "Protection for Sale: An Empirical Investigation," American Economic Review, American Economic Association, vol. 89(5), pages 1135-1155, December.
    12. Lopez, Rigoberto A & Pagoulatos, Emilio, 1996. "Trade Protection and the Role of Campaign Contributions in U.S. Food and Tobacco Industries," Economic Inquiry, Western Economic Association International, vol. 34(2), pages 237-248, April.
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