Title

Essays in trade, development and political economy

Date of Award

2005

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

Advisor(s)

Devashish Mitra

Keywords

International trade, Thailand, Trade, Political economy

Subject Categories

Economics | International Economics | Social and Behavioral Sciences

Abstract

This dissertation consists of three essays in trade, development and political economy. The first essay looks at the economic effects of trade policies in Thailand, specifically on firm productivity growth and market power. By employing Hall's (1988) growth accounting method, we find linear and robust negative relationships between tariffs and productivity growth across various levels of industry dummy variables. Interestingly, we find that a firm's markup increases with tariff levels, but at some critical point it starts to decrease. This finding fits nicely with the tariff redundancy argument.

The second essay computes the disaggregated import-demand elasticities across each of 28 industries and looks at the economic effects of trade policies in Thailand on the import-demand elasticity. Our estimates of import-demand elasticities come close to unity on average. For the effect of trade policy on import-demand elasticity, our results consistently indicate an increase in these elasticities when the industry adopts a freer trade policy across two measures for trade policy (a trade liberalization dummy and import tariffs).

The third essay explores the political and economic determinants of trade policy in Thailand. The investigation is guided by the Protection for Sale model of Grossman and Helpman (1994). Unlike previous papers that use a discrete method (dummy variable), this paper identifies industries that are organized in a more continuous fashion by counting the number of MPs with business backgrounds to match our Thai-Standard Industry Code (TSIC) industries. The results suggest that politically-organized industries can influence the way a country shapes its trade protection policies. A politically-organized production industry will seek a higher level of protection, while a politically-organized distribution industry will seek a lower degree of protection. In addition, this paper finds consistent outcomes with the prediction of the Grossman and Helpman (G-H) model using Thai data.

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