Abstract.
There is a great deal of protection against used automobile imports in many countries of the world that has gone largely unnoticed in the trade policy literature. Indeed, there has been no recent attempt to systematically analyze the determinants of used automobile trade and the role of protection in this trade. This paper makes a preliminary attempt, introducing an ordered measure of protection levels in 132 countries. A gravity model of used automobile exports from the United States shows that protection measures against used automobile import have a statistically-significant, suppressive effect on trade flows. An ordered probit analysis of the protection measures themselves points to new automobile production interests as a key factor behind used automobile protection. Other relevant explanatory factors of protection are income levels, democratic regime, transitional status, WTO membership, and income distribution.
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First version received: December 2002/Final version received: August 2003
The authors would like to thank Ken Button, Michael Ferrantino, Kingsley Haynes, the late Don Lavois, Keith Maskus, Arvind Panagariya, Baldev Raj, Thomas Strattman, Roger Stough, Wendy Takacs, Michael Walsh, and two anonymous referees for helpful comments and discussions.
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Pelletiere, D., Reinert, K. Used automobile protection and trade: Gravity and ordered probit analysis. Empirical Economics 29, 737–751 (2004). https://doi.org/10.1007/s00181-004-0216-6
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DOI: https://doi.org/10.1007/s00181-004-0216-6