Régibeau, P and Rockett, K (2006) Administrative Delays as Barriers to Trade. B E Journal of Economic Analysis & Policy, 5 (1). creators-Rockett=3AKatharine=3A=3A. DOI https://doi.org/10.1515/1538-0645.1504
Régibeau, P and Rockett, K (2006) Administrative Delays as Barriers to Trade. B E Journal of Economic Analysis & Policy, 5 (1). creators-Rockett=3AKatharine=3A=3A. DOI https://doi.org/10.1515/1538-0645.1504
Régibeau, P and Rockett, K (2006) Administrative Delays as Barriers to Trade. B E Journal of Economic Analysis & Policy, 5 (1). creators-Rockett=3AKatharine=3A=3A. DOI https://doi.org/10.1515/1538-0645.1504
Abstract
We study a two-country model where two firms, one domestic and the other foreign, must decide when to introduce their new product into a market. The home government may apply an import tariff, an administrative delay, or both to the product of the foreign firm. An administrative delay imposes a waiting period between the time when the quality of the foreign product is determined and the time when the product can actually be sold. Our main interest is the differential effect of the tariff and the administrative delay on the timing of new product introductions and the resulting change in home, foreign and world welfare. We show that administrative delays are less efficient instruments for maximizing home welfare than tariffs. With a tariff, the home government can affect the timing of entry to ensure that the domestic firm moves first at the socially optimal date. Although an optimally chosen delay can achieve the same pattern of introduction, it does not yield any tariff revenues. As a result, if the tariff may be set optimally, administrative delays are not used in a discriminatory manner. If trade liberalization constrains the import tariff to be below its domestically optimal level, discriminatory administrative delays may become part of the optimal policy of the home country. As the optimal delay policy leads to lower levels of world welfare than the optimal tariff, trade liberalization can be welfare decreasing.
Item Type: | Article |
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Uncontrolled Keywords: | non-tariff barriers to trade; tariffs; standards; trade protection |
Subjects: | H Social Sciences > HB Economic Theory |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 11 Jul 2012 15:44 |
Last Modified: | 01 Nov 2024 00:55 |
URI: | http://repository.essex.ac.uk/id/eprint/2858 |