Protection and international sourcing
By: Emanuel Ornelas and John L. Turner.
Contributors: Turner, John L., 1973-; London School of Economics and Political Science. Centre for Economic Performance.
Series: CEP discussion paper -- no. 900
Publisher: Centre for Economic Performance, London School of Economics and Political Science
Published: 2008
Place of publication: London
Language: eng
Format: Electronic resource
Description: We study the impact of import protection on relationship-specific investments, organizational choice and welfare. We show that a tariff on intermediate inputs can improve social welfare through mitigating hold-up problems. It does so if it discriminates in favor of the investing party, thereby improving its bargaining position. On the other hand, a tariff can prompt inefficient organizational choices if it discriminates in favor of less productive firms or if integration costs are low. Protection distorts organizational choices because tariff revenue, which is external to the firms, drives a wedge between the private and social gains to offshoring and integration.
Notes: Title from PDF file (viewed on Jan. 23, 2009).

"December 2008."

Includes bibliographical references.

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Mode of access: World Wide Web.