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Industrial Organization and Trade Liberalization: Evidence from Korea

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  • de Melo, Jaime
  • Roland-Holst, David

Abstract

Based on evidence about industrial organization and market structure, this paper develops a CGE model with increasing returns to scale (IRTS) in selected industrial sectors in order to estimate the welfare gains Korea would achieve from abolishing the import restraints (tariffs and equivalent measures) prevailing in 1982. Under constant returns (CRTS) across the board, welfare gains are estimated at 1% of GDP. With IRTS in three industrial sectors, welfare gain estimates range from -0.5% to 10% of 1982 GDP, depending on the assumptions concerning price setting behavior and profit levels that existed under protecti.

Suggested Citation

  • de Melo, Jaime & Roland-Holst, David, 1990. "Industrial Organization and Trade Liberalization: Evidence from Korea," CEPR Discussion Papers 399, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:399
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    Cited by:

    1. de Dios, Loreli C., 1994. "Meat and Dairy Processing Industry: Impact of Trade Policy Reforms on Performance, Competitiveness and Structure," Research Paper Series RPS 1994-09, Philippine Institute for Development Studies.
    2. T. Condon & J. de Melo, 2015. "Industrial Organization Implications of QR Trade Regimes: Evidence and Welfare Costs," World Scientific Book Chapters, in: Modeling Developing Countries' Policies in General Equilibrium, chapter 19, pages 405-419, World Scientific Publishing Co. Pte. Ltd..
    3. Cockburn, John & Decaluwé, Bernard & Dostie, Benoît, 1998. "Les leçons du mariage entre les modèles d’équilibre général calculable et la nouvelle théorie du commerce international," L'Actualité Economique, Société Canadienne de Science Economique, vol. 74(3), pages 381-413, septembre.
    4. Ferjani, Ali, 2003. "Imperfect Competition, Economies of Scale and Trade Liberalisation in Tunisia - A Comparative Analysis Using a Computable General Equilibrium Model (CGEM)," Agrarwirtschaft und Agrarsoziologie\ Economie et Sociologie Rurales, Swiss Society for Agricultural Economics and Rural Sociology, vol. 2003(1), pages 1-18.
    5. Willenbockel, Dirk, 2004. "Specification choice and robustness in CGE trade policy analysis with imperfect competition," Economic Modelling, Elsevier, vol. 21(6), pages 1065-1099, December.

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    More about this item

    Keywords

    Industrial Organization; Korea; Protectionism; Returns to Scale; Tariffs; Welfare Costs;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F00 - International Economics - - General - - - General
    • F01 - International Economics - - General - - - Global Outlook
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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