Technology adoption: on the non equivalence of tariffs and quotas


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This paper examines the effects of trade policies on the adoption of new technologies. A two-sector model with international-trade is developed where technological progress is neutral. A group of interest (suppliers of skilled labor), acting in coalition, decide which technology will be available for firms. The key findings are the following. With free trade, or a tariff, the best technology is always used; Under a quota, generally the best technology is not used. In other words, with respect to adoption of new technologies we have equivalence between free trade and tariffs. A quota generates resistance to new technologies while with free trade or tariffs this resistance is eliminated.

Keyword : coalitions, technology adoption, quota, tariff coalizões, adoção de tecnologia, cota, tarifa

How to Cite
Herrendorf, B., & Teixeira, A. (2007). Technology adoption: on the non equivalence of tariffs and quotas. Brazilian Business Review, 4(3), 195–217.

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