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Trade Policy and Market Structure Interactions in Developing Countries

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 perfec...

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Bibliographic Details
Corporate Author: International Monetary Fund
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1989
Series:IMF Working Papers
Subjects:
Tariffs
Tariff
International Trade Organizations
Public Finance & Taxation
Taxes
Trade Policy
Trade Liberalization
Production
Trade: General
Exports And Imports
International Economics
Macroeconomics: Production
Industrial Capacity
Capacity Utilization
Commercial Policy
International Trade
Macroeconomics
Taxation
Imports
Production And Operations Management
Korea, Republic Of
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary: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
Physical Description:32 pages
ISBN:9781451951639

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