Do Safeguard Tariffs and Antidumping Duties Open or Close Technology Gaps?
This paper examines how the country-breadth of tarif
protection can affect the technology adoption decisions of both domestic import-competing and foreign exporting firms. The analysis is novel in that shows how rm-level technology adoption changes under tariffs of different country-breadth. I show that a country-specific tariff
like an antidumping duty induces
both domestic import-competing firms and foreign exporting firms to adopt a new technology
earlier than they would under free trade. In contrast, a broadly-applied tariff
like a safeguard
can accelerate technology adoption by a domestic import-competing firm, but will slow-down
technology adoption by foreign exporting firms. Because safeguard tariffs can delay the foreign
firm's adoption of new technology, the worldwide welfare costs associated with using them may
be larger than is generally believed.