Endogenous protection in imperfect competitive markets: an empirical analysis for Mercosur countries

Rosario

Congreso; XLVIII Reunión Anual de la Asociación Argentina de Economía Política; 2013

Asociación Argentina de Economía Política

This paper aims to study the endogenous structure of tariffs for a sample of Mercosur countries. The empirical analysis is carried out by taking into account an extended version of Grossman and Helpman's (1994) approach to the case of monopolistic competition. The theoretical model is supported by the empirical evidence. Estimations of the endogenous tariff regression show that estimated coefficients present the expected sign. The approximated inferred value of the general welfare weight suggests that Mercosur governments, in average, would attach a weight to those individuals belonging to an interest group that is approximately 25 percent above the weight given to non-organized individuals.