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dc.titleHow do Trade Restrictions Affect Market Diversity?
dc.contributor.authorUribe-Terán, Carlos
dc.contributor.authorGrijalva, Diego F.
dc.contributor.authorGachet, Iván
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageLatin America
dc.date.available2025-04-09T00:04:00
dc.date.issue2025-04-09T00:04:00
dc.description.abstractThis paper examines the impact of safeguard import tariffs on market diversity in Ecuador from 2015 to 2017. Using firm-level data, we estimate the effects of tariffs on revenue and market shares in the Manufacturing and Wholesale & Retail (W&R) sectors with a Quantile Treatment Effect on the Treated (QTT) estimator. We also assess firm exit probabilities and pass-through effects on prices through a difference-in-differences approach. By linking firm-level QTT estimates to industry-level diversity measures, we construct counterfactual revenue distributions to quantify the effect on market concentration. We find that tariffs disproportionately reduced revenue and market shares for smaller firms, significantly increasing exit rates and reducing market diversity, with stronger effects in W&R. While tariffs did not generate broad inflationary pressures, they induced short-term pass-through effects that further strained smaller firms. These sector-specific price responses reinforced market consolidation, accelerating the decline in market diversity.
dc.format.extent40
dc.identifier.doihttp://dx.doi.org/10.18235/0013490
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/How-do-Trade-Restrictions-Affect-Market-Diversity.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectSmall Business
dc.subjectTrade Policy
dc.subjectTariff System
dc.subjectSafeguard
dc.subjectEmerging Market
dc.subjectIndustry
dc.subjectManufacturing Industry
dc.subjectImport
dc.subjectIntegration and Trade
dc.subject.jelcodeD40 - Market Structure, Pricing, and Design: General
dc.subject.jelcodeF13 - Trade Policy • International Trade Organizations
dc.subject.jelcodeF14 - Empirical Studies of Trade
dc.subject.jelcodeO24 - Trade Policy • Factor Movement Policy • Foreign Exchange Policy
dc.subject.jelcodeO54 - Latin America • Caribbean
dc.subject.keywordsmarket structure;trade policy;Protectionism;emerging markets
dc.typeWorking Papers
idb.identifier.pubnumberIDB-WP-01687
idb.operationRG-K1198
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