Import tariffs and transport prices
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(Published version)
Date
2024
Authors
Staehler, F.
Boddin, D.
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Journal article
Citation
Canadian Journal of Economics, 2024; 57(2):430-458
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Dominik Boddin, Frank Stähler
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Abstract
This paper discusses how import tariffs interact with transport prices in episodes of trade liberalization. We develop a model of a transport industry that operates under imperfect competition and economies of scale. Double marginalization due to market power reduces the effects of trade liberalization, while a larger trade volume may support them due to economies of scale. We use a large data set of maritime transport data and combine it with tariff data to find that economies of scale beat market power: a decline in the tariff implies a decline in freight rates.
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First published: 18 April 2024
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© The Authors. Canadian Journal of Economics/Revue canadienne d’économique published by Wiley Periodicals LLC on behalf of Canadian Economics Association. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.