Susumu Imai, Economics Discipline Group, University of Technology Sydney, Sydney, Australia
Hajime Katayama, Waseda University
Kala Krishna, Pennsylvania State University and NBER
Date of publication: June 2013
Working paper number: 12
This paper proposes a new test of the Protection for Sale (PFS) model by Grossman and Helpman (1994). Unlike existing methods in the literature, our approach does not require any data on political organization. We use quantile and IV quantile regressions to do so using the data from Gawande and Bandyopadhyay (2000). Surprisingly, the results do not provide any evidence favoring the PFS model. We also explain why previous work may have inadvertently found support for it.
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