NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Protection for Sale with Imperfect Rent Capturing

Giovanni Facchini, Johannes Van Biesebroeck, Gerald Willmann

NBER Working Paper No. 11269
Issued in April 2005, Revised in November 2005
NBER Program(s):ITI, PR

Structurally estimating the Grossman and Helpman (1994) model using coverage ratios that include non-tariff barriers leads to biased parameter estimates. We develop a "protection for sale" theoretical framework consistent with the data, by explicitly allowing for non-tariff barriers. Introducing partial rent capturing we obtain a testable specification which finds support in the data. Our results suggest that average rent capturing is in the order of 72-75 percent.

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Document Object Identifier (DOI): 10.3386/w11269

Published: Facchini, Giovanni, Johannes Van Biesebroeck and Gerald Willmann. "Protection for Sale with Imperfect Rent Capturing." Canadian Journal of Economics 39,3 (August 2006): 845-873. citation courtesy of

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