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A new empirical test of the infant-industry argument : the case of Switzerland protectionism during the 19th century

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  • Léo CHARLES

Abstract

I employ the “granger causality” test to determine the nature of Swiss protectionism during the first wave of globalization (1886-1913). This test is applied for the first time to test if the protectionism takes the form of an infant-industry protection. I argue that if tariffs cause exports flow, the economy implement a protection following List’s principles. I use a highly disaggregated database of exports flow and tariffs at the product level. It allows dealing with a panel-VAR structure to test my hypothesis. In the descriptive study I show that Switzerland protectionism is moderate and selective, giving argument in favour of an infant industry protection. Then, the result of the “granger causality” test clearly shows that my different measures of protection “granger cause” exports flows. This article gives a new empirical test of the infant industry protection argument.

Suggested Citation

  • Léo CHARLES, 2017. "A new empirical test of the infant-industry argument : the case of Switzerland protectionism during the 19th century," Cahiers du GREThA (2007-2019) 2017-11, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    • Handle: RePEc:grt:wpegrt:2017-11
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    File URL: http://cahiersdugretha.u-bordeaux.fr/2017/2017-11.pdf
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    Cited by:

    1. Bent, Peter H., 2020. "Recovery from financial crises in peripheral economies, 1870–1913," Explorations in Economic History, Elsevier, vol. 78(C).

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    More about this item

    Keywords

    International trade; Protectionism; First Globalization;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N73 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: Pre-1913

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