IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/873.html
   My bibliography  Save this paper

Measure and interpretation of effective protection in the presence of high capital costs : evidence from India

Author

Listed:
  • Ettori, Francois M.

Abstract

This paper is derived from a previous working paper prepared within a comprehensive review of India's trade regime and protection policies. One striking feature of India's protection structure has been the very high tariffs and protection on capital goods, thereby harming industrial competitiveness (and export potential) and distorting industrial incentives as they are indicated by Effective Protection Rates (EPRs). This paper presents three main themes. First, it provides a brief refresher on the definition of EPR and its limited interpretation as a measure of the scope for inefficiency or extra-profit resulting from protection, with a simple geometrical representation. In the second part, the paper introduces the notions and formulae of Corrected Effective Protection Rates (CEPR) and Net Effective Protection (NEPR), also with a geometrical representation. Finally, the paper tests the relevance of these notions, and assesses their magnitude -- in the case of India on the basis of a sample of some 60 industrial projects. A brief conclusion summarizes the major findings and draws some tentative conclusions.

Suggested Citation

  • Ettori, Francois M., 1992. "Measure and interpretation of effective protection in the presence of high capital costs : evidence from India," Policy Research Working Paper Series 873, The World Bank.
    • Handle: RePEc:wbk:wbrwps:873
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1992/03/01/000009265_3961002141752/Rendered/PDF/multi0page.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bruno, Michael, 1972. "Domestic Resource Costs and Effective Protection: Clarification and Synthesis," Journal of Political Economy, University of Chicago Press, vol. 80(1), pages 16-33, Jan.-Feb..
    2. Bela Balassa & Daniel M. Schydlowsky, 1968. "Effective Tariffs, Domestic Cost of Foreign Exchange, and the Equilibrium Exchange Rate," Journal of Political Economy, University of Chicago Press, vol. 76(3), pages 348-348.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eckhard Siggel, 2006. "International Competitiveness and Comparative Advantage: A Survey and a Proposal for Measurement," Journal of Industry, Competition and Trade, Springer, vol. 6(2), pages 137-159, June.
    2. Waqar Akhtar & Muhammad Sharif & Nadeem Akmal, 2007. "Analysis of Economic Efficiency and Competitiveness of the Rice Production Systems of Pakistan’s Punjab," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 12(1), pages 141-153, Jan-Jun.
    3. Haeri, Ali & Arabmazar, Abbas, 2018. "Designing an Industrial Policy for Developing Countries: a New Approach," MPRA Paper 89048, University Library of Munich, Germany.
    4. Riffat Ara Zannat Tama & Aurup Ratan Dhar & Ismat Ara Begum, 2018. "An Economic Perspective of the Export Potentiality of Aromatic Rice in Bangladesh," American Journal of Economics and Business Administration, Science Publications, vol. 10(1), pages 22-30, July.
    5. Islam, Mohammad Ariful, 2016. "Comparative Advantage and Cost Efficiency of Rice-Producing Farms in Bangladesh: A Policy Analysis," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 52(3), pages 85-96.
    6. Anthony Bottomley, 1980. "Western Textbook Theory and the Developing Countries," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 19(2), pages 143-157.
    7. Touré, Ali A. & Groenewald, Jan & Seck, Papa Abdoulaye & Diagne, Aliou, 2013. "Analysing policy-induced effects on the performance of irrigated rice," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 8(1), pages 1-10, July.
    8. Sanzidur Rahman & Mohammad Mizanul Haque Kazal & Ismat Ara Begum & Mohammad Jahangir Alam, 2016. "Competitiveness, Profitability, Input Demand and Output Supply of Maize Production in Bangladesh," Agriculture, MDPI, vol. 6(2), pages 1-14, May.
    9. Medilo, Maria Cristina, 1994. "Packaging Industry: Impact of Trade Policy Reforms on Performance, Competitiveness and Structure," Research Paper Series RPS 1994-01, Philippine Institute for Development Studies.
    10. Truong, Kiet Hong Vo Tuan & Sidique, Shaufique Fahmi & Shamsudin, Mad Nasir & Hadi, Ahmad Hanis Izani Abdul, 2022. "Cost Structure and Comparative Advantage of Export Supply Chain of Chu-Mango in the Mekong Delta, Vietnam," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 13(03), September.
    11. Haim Levy, 1979. "Project Evaluation, Government Intervention and the Price of Foreign Exchange," Revue Économique, Programme National Persée, vol. 30(1), pages 31-71.
    12. von Braun, Joachim & Puetz, Detlev & Webb, Patrick, 1989. "Irrigation technology and commercialization of rice in the Gambia: effects on income and nutrition," Research reports 75, International Food Policy Research Institute (IFPRI).
    13. Pantzios, Christos J. & Taylor, Timothy G., 1998. "Trade Liberalization And Japanese Agricultural Import Policies," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(2), pages 1-13, December.
    14. Cabanilla, Liborio S., 1983. "Economic Incentives and Comparative Advantage in the Livestock Industry," Working Papers WP 1983-07, Philippine Institute for Development Studies.
    15. El Obeid, Amani E., 1994. "Measurement of the effective rate of protection for agricultural commodities in Sudan," ISU General Staff Papers 1994010108000017638, Iowa State University, Department of Economics.
    16. Mendoza, Edwin Gil Q., 1994. "Shipbuilding/Repair and Boatbuilding Industry," Research Paper Series RPS 1994-07, Philippine Institute for Development Studies.
    17. Touré, Ali A. & Groenewald, Jan & Seck, Papa Abdoulaye & Diagne, Aliou, 2013. "Analysing policy-induced effects on irrigated rice performance," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 160288, African Association of Agricultural Economists (AAAE).
    18. Erokhin, Vasilii & Ivolga, Anna & Lazareva, Natalia & Germanova, Victoria & Igonina, Elena & Sofin, Alexander, 2024. "China—Eastern Europe Agricultural Trade: (Dis)Advantages and Policy Responses," Research on World Agricultural Economy, Nan Yang Academy of Sciences Pte Ltd (NASS), vol. 5(2), June.
    19. Muhammad A. Quddus & Usman Mustafa, 2011. "Comparative Advantage of Major Crops Production in Punjab: An Application of Policy Analysis Matrix," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 16(1), pages 63-94, Jan-Jun.
    20. Wiebelt, Manfred & Herrmann, Roland & Schenck, Patricia & Thiele, Rainer, 1992. "Discrimination against agriculture in developing countries?," Open Access Publications from Kiel Institute for the World Economy 458, Kiel Institute for the World Economy (IfW Kiel).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:873. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.