Trade Policy and Market Structure Interactions in Developing Countries [electronic resource]
Material type:
TextSeries: IMF Working Papers; Working Paper ; No. 89/91Publication details: Washington, D.C. : International Monetary Fund, 1989Description: 1 online resource (32 p.)ISBN: 1451951639 :ISSN: 1018-5941Subject(s): Equation | Free Trade | Imported Inputs | Perfect Competition | Trade Regimes | Ghana | India | Israel | Korea, Republic of | PakistanAdditional physical formats: Print Version:: Trade Policy and Market Structure Interactions in Developing CountriesOnline resources: IMF e-Library | IMF Book Store Abstract: This paper shows that the presence of quotas on imported inputs that are based on installed capacity can lead to capacity underutilization in manufacturing industries of developing countries. A replacement of such quotas, by tariffs leads to full capacity utilization under assumptions of both perfectly and imperfectly competitive markets. Furthermore, such a policy also eliminates strategic advantages for oligopolistic firms that arise in quota-based regimes.
This paper shows that the presence of quotas on imported inputs that are based on installed capacity can lead to capacity underutilization in manufacturing industries of developing countries. A replacement of such quotas, by tariffs leads to full capacity utilization under assumptions of both perfectly and imperfectly competitive markets. Furthermore, such a policy also eliminates strategic advantages for oligopolistic firms that arise in quota-based regimes.
Description based on print version record.
There are no comments on this title.