DOES IMPORT PROTECTION ACT AS EXPORT PROMOTION - EVIDENCE FROM THE UNITED-STATES

Strategic trade policy theory suggests how import protection can be ex port-promoting under increasing returns to scale. I test this hypothes is for 200 US import protection can be export-competing industries cha racterized by varying degrees of increasing returns to scale. After re moving political economy endogeneities in tariff and non-tariff barrie rs. targeted import protection most frequently has been export-deterri ng. Moreover, export deterrence has been greatest in industries displa ying the strongest static or dynamic scale economies. These results ar e consistent with earlier evidence that protection rarely stimulates d omestic output and frequently promotes inefficient firm scale and entr y.