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Technical Barriers, Licenses and Tariffs as Means of Limiting Market Access

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Technical barriers (standards), import licenses and tariffs may be deployed as means of limiting the market access of foreign firms. The present paper examines these measures in a setting of monopolistic competition. We find that, if protection focuses predominantly on the number of foreign firms accessing the domestic market, a technical barrier (an import license) may dominate a tariff (tariff and a tech- nical barrier) in terms of consumer welfare, even when tariff revenues are fully redistributed. However, if protection pays su±cient focus on limiting the total import volume, then tariffs are the preferred means of protection. Within the model, reductions in technical barriers and tariffs, the removal of licensing schemes, and a harmonization of stan- dards are all welfare-improving policies.
Original languageEnglish
JournalJournal of Economic Integration
Pages (from-to)120-146
Publication statusPublished - 2006

    Research areas

  • standards, non-tariff barriers, monopolistic competition

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