Year: 2020
Type: article
Abstract: Tariffs are generally assumed to depend on the product, not the identity of the importer. However, special economic zones are a common, economically important policy used worldwide to lower tariffs on selected goods for selected manufacturers. I show this is motivated by policymakers’ desire to discriminate across buyers when a tax is intended to raise prices for sellers, through a mechanism distinct from existing theories of optimal taxation. Using a new dataset compiled from public records and exogenous changes in imports of intermediate goods, I find the form, composition, and size of US zones are consistent with the theory. (JEL F13, F14, L60, R32)
Source: American Economic Review
DOI: 10.1257/aer.20180384
Author: Matthew Grant
Institution: Stanford University
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W3022858828