Halis Yildiz - Academia.edu (original) (raw)

Papers by Halis Yildiz

Research paper thumbnail of The Case for MFN under Asymmetries of Cost and Market Structure

This paper constructs a three-country partial equilibrium model to examine the effects of the mos... more This paper constructs a three-country partial equilibrium model to examine the effects of the most favored nation (MFN) clause on equilibrium tariffs and welfare when exporting countries are asymmetric with respect to market structure as well as production costs. In the model, firms sell differentiated goods and compete in prices. We contrast two policy scenarios: one where the importing country is free to tariff discriminate among exporters and another where it must treat them the same (MFN). Relative to tariff discrimination, MFN benefits low cost (more concentrated) exporters and hurts high cost (less concentrated) ones. While MFN is generally preferable to discrimination from a global welfare perspective, such need not be the case when high cost exporters enjoy greater market power (because they are merged into a single unit) than low cost ones. Under such a situation, if cost differences between exporters are not too large then tariff discrimination favors low cost producers an...

Research paper thumbnail of Preferential Trade Agreements and Rules of the Multilateral Trading System

Research paper thumbnail of Implications of multilateral tariff bindings on the formation of preferential trade agreements and quest for global free trade

Research paper thumbnail of Tariff bindings and the dynamic formation of preferential trade agreements

Journal of International Economics, 2019

Research paper thumbnail of Do Free Trade Agreements Affect Tariffs of Nonmember Countries? A Theoretical and Empirical Investigation

American Economic Journal: Applied Economics, 2018

We investigate the effects of free trade agreements (FTAs) on tariffs of nonmember countries. In ... more We investigate the effects of free trade agreements (FTAs) on tariffs of nonmember countries. In our multi-country model, the formation of an FTA leads members to reduce their exports to the rest of the world. Such external trade diversion weakens the ability of nonmembers to manipulate their terms of trade vis-à-vis FTA members, a mechanism that induces them to lower their tariffs on FTA members. We empirically confirm this insight using industry-level trade data for 192 importing and 253 exporting countries, along with information on all FTAs formed in the world during 1989–2011. (JEL F13, F14)

Research paper thumbnail of Do South-South preferential trade agreements undermine the prospects for multilateral free trade?

Canadian Journal of Economics/Revue canadienne d'économique, 2017

Research paper thumbnail of Bilateral Trade Agreements and the Feasibility of Multilateral Free Trade

Review of International Economics, 2011

Research paper thumbnail of On the Relationship between Preferential and Multilateral Trade Liberalization: The Case of Customs Unions

American Economic Journal: Microeconomics, 2013

This paper compares equilibrium outcomes of two games of trade liberalization. In the Bilateralis... more This paper compares equilibrium outcomes of two games of trade liberalization. In the Bilateralism game, countries choose whether to liberalize trade preferentially via a customs union (CU), multilaterally, or not at all. The Multilateralism game is a restricted version of the Bilateralism game in that countries cannot form CUs and can only undertake non-discriminatory trade liberalization. When countries have symmetric endowments, global free trade is the only stable equilibrium of both games. Allowing for endowment asymmetry, we isolate circumstances where the option to form CUs helps further the cause of multilateral liberalization as well as where it does not. (JEL F12, F13)

Research paper thumbnail of Consumption Externalities, Product Quality, and the Role of National Treatment

In Article III of the WTO, National Treatment limits domestic policy in an e¤ort to curtail prote... more In Article III of the WTO, National Treatment limits domestic policy in an e¤ort to curtail protectionist discrimination against foreign products. We examine National Treatment when goods are vertically di¤erentiated and generate consumption external- ities in two interdependent product markets, comparing quantity and price equilibria under Article III with those prevailing in a world in which Article III does not apply. While one may expect that high externalities would lead to a greater need for discrim- inatory policies, we show this is often not the case and, furthermore, that National Treatment can lead to a cleaner world environment.

Research paper thumbnail of Product Quality, Consumption Externalities, and the Role of National Treatment

Research paper thumbnail of Should the WTO require free trade agreements to eliminate internal tariffs?

Journal of International Economics

Research paper thumbnail of Foreign Direct Investment and the Choice of Environmental Policy

Working Papers, 2009

We use an oligopoly model of intra-industry trade to examine the implications of foreign direct i... more We use an oligopoly model of intra-industry trade to examine the implications of foreign direct investment for the pollution haven hypothesis and environmental policy. Countries which lower environmental standards to be more competitive in world markets generate pollution havens if environmental policy is …xed. However, if FDI is a viable option as a mode of entry, pro…t-shifting considerations weaken in favour of environmental considerations and FDI-recipients tighten environmental policy, weakening the pollution haven hypothesis by reducing incentives to relocate production. Interestingly, FDI may still occur in spite of the stricter standards in order to level the playing …eld. We derive conditions under which the FDI-receiving country has an incentive to manipulate its environmental standard to prevent or attract FDI, potentially eliminating or creating pollution havens. Without manipulation of standards, FDI leads to improvements in world pollution levels. However, when countries manipulate their standards, FDI can lead to a dirtier environment if the two countries are substantially di¤erent in their valuation of environmental damages.

Research paper thumbnail of External Trade Diversion, Exclusion Incentives and the Nature of Preferential Trade Agreements

Research paper thumbnail of Preferential versus multilateral trade liberalization and the role of political economy

European Economic Review, 2015

Research paper thumbnail of Inter-regional Competition, Comparative Advantage, and Environmental Federalism

In this paper, we compare endogenous environmental policy setting with centralized and decentrali... more In this paper, we compare endogenous environmental policy setting with centralized and decentralized governments when regions have comparative advantages in different polluting goods. We develop a two-region, two-good model with inter-regional environmental damages and perfect competition in product markets, where both regions produce both goods. Despite positive spillovers of pollution across regions, the model predicts that decentralization may lead to

Research paper thumbnail of On the relationship between tariff levels and the nature of mergers

This paper employs an endogenous merger formation approach in a two-country oligopoly model of tr... more This paper employs an endogenous merger formation approach in a two-country oligopoly model of trade to examine the international linkages between the nature of mergers and tariff levels. Firms sell differentiated products and compete in a Bertrand fashion in product markets. We find two effects playing key roles in determining equilibrium market structure: the tariff saving effect and the protection

Research paper thumbnail of Inter-regional competition, comparative advantage and environmental federalism

Canadian Journal of Economics/Revue canadienne d'économique, 2014

In this paper, we compare endogenous environmental policy setting with centralized and decentrali... more In this paper, we compare endogenous environmental policy setting with centralized and decentralized governments when regions have comparative advantages in di¤erent polluting goods. We develop a tworegion, two-good model with inter-regional environmental damages and perfect competition in product markets, where both regions produce both goods. Despite positive spillovers of pollution across regions, the model predicts that decentralization may lead to weaker or stricter environmental standards or taxes, depending on the degree of regional comparative advantage and the extent of transboundary pollution. This suggests that federalism can lead to either a "race to the bottom" or a "race to the top," without relying on ine¢ cient lobbying e¤orts or capital competition.

Research paper thumbnail of Free Trade Agreements versus Customs Unions: Implications for Global Free Trade

Research paper thumbnail of Essays on the Linkages Between Industry Structure and Trade Liberalization

Research paper thumbnail of Environmental Protection Standards and International Trade Policy

Abstract We critically examine the implications of the most favored nation (MFN) clause under asy... more Abstract We critically examine the implications of the most favored nation (MFN) clause under asymmetric environmental standards. Using an oligopolistic intra" industry trade model, we show that tariff discrimination leads to an environmentally beneficial trade ...

Research paper thumbnail of The Case for MFN under Asymmetries of Cost and Market Structure

This paper constructs a three-country partial equilibrium model to examine the effects of the mos... more This paper constructs a three-country partial equilibrium model to examine the effects of the most favored nation (MFN) clause on equilibrium tariffs and welfare when exporting countries are asymmetric with respect to market structure as well as production costs. In the model, firms sell differentiated goods and compete in prices. We contrast two policy scenarios: one where the importing country is free to tariff discriminate among exporters and another where it must treat them the same (MFN). Relative to tariff discrimination, MFN benefits low cost (more concentrated) exporters and hurts high cost (less concentrated) ones. While MFN is generally preferable to discrimination from a global welfare perspective, such need not be the case when high cost exporters enjoy greater market power (because they are merged into a single unit) than low cost ones. Under such a situation, if cost differences between exporters are not too large then tariff discrimination favors low cost producers an...

Research paper thumbnail of Preferential Trade Agreements and Rules of the Multilateral Trading System

Research paper thumbnail of Implications of multilateral tariff bindings on the formation of preferential trade agreements and quest for global free trade

Research paper thumbnail of Tariff bindings and the dynamic formation of preferential trade agreements

Journal of International Economics, 2019

Research paper thumbnail of Do Free Trade Agreements Affect Tariffs of Nonmember Countries? A Theoretical and Empirical Investigation

American Economic Journal: Applied Economics, 2018

We investigate the effects of free trade agreements (FTAs) on tariffs of nonmember countries. In ... more We investigate the effects of free trade agreements (FTAs) on tariffs of nonmember countries. In our multi-country model, the formation of an FTA leads members to reduce their exports to the rest of the world. Such external trade diversion weakens the ability of nonmembers to manipulate their terms of trade vis-à-vis FTA members, a mechanism that induces them to lower their tariffs on FTA members. We empirically confirm this insight using industry-level trade data for 192 importing and 253 exporting countries, along with information on all FTAs formed in the world during 1989–2011. (JEL F13, F14)

Research paper thumbnail of Do South-South preferential trade agreements undermine the prospects for multilateral free trade?

Canadian Journal of Economics/Revue canadienne d'économique, 2017

Research paper thumbnail of Bilateral Trade Agreements and the Feasibility of Multilateral Free Trade

Review of International Economics, 2011

Research paper thumbnail of On the Relationship between Preferential and Multilateral Trade Liberalization: The Case of Customs Unions

American Economic Journal: Microeconomics, 2013

This paper compares equilibrium outcomes of two games of trade liberalization. In the Bilateralis... more This paper compares equilibrium outcomes of two games of trade liberalization. In the Bilateralism game, countries choose whether to liberalize trade preferentially via a customs union (CU), multilaterally, or not at all. The Multilateralism game is a restricted version of the Bilateralism game in that countries cannot form CUs and can only undertake non-discriminatory trade liberalization. When countries have symmetric endowments, global free trade is the only stable equilibrium of both games. Allowing for endowment asymmetry, we isolate circumstances where the option to form CUs helps further the cause of multilateral liberalization as well as where it does not. (JEL F12, F13)

Research paper thumbnail of Consumption Externalities, Product Quality, and the Role of National Treatment

In Article III of the WTO, National Treatment limits domestic policy in an e¤ort to curtail prote... more In Article III of the WTO, National Treatment limits domestic policy in an e¤ort to curtail protectionist discrimination against foreign products. We examine National Treatment when goods are vertically di¤erentiated and generate consumption external- ities in two interdependent product markets, comparing quantity and price equilibria under Article III with those prevailing in a world in which Article III does not apply. While one may expect that high externalities would lead to a greater need for discrim- inatory policies, we show this is often not the case and, furthermore, that National Treatment can lead to a cleaner world environment.

Research paper thumbnail of Product Quality, Consumption Externalities, and the Role of National Treatment

Research paper thumbnail of Should the WTO require free trade agreements to eliminate internal tariffs?

Journal of International Economics

Research paper thumbnail of Foreign Direct Investment and the Choice of Environmental Policy

Working Papers, 2009

We use an oligopoly model of intra-industry trade to examine the implications of foreign direct i... more We use an oligopoly model of intra-industry trade to examine the implications of foreign direct investment for the pollution haven hypothesis and environmental policy. Countries which lower environmental standards to be more competitive in world markets generate pollution havens if environmental policy is …xed. However, if FDI is a viable option as a mode of entry, pro…t-shifting considerations weaken in favour of environmental considerations and FDI-recipients tighten environmental policy, weakening the pollution haven hypothesis by reducing incentives to relocate production. Interestingly, FDI may still occur in spite of the stricter standards in order to level the playing …eld. We derive conditions under which the FDI-receiving country has an incentive to manipulate its environmental standard to prevent or attract FDI, potentially eliminating or creating pollution havens. Without manipulation of standards, FDI leads to improvements in world pollution levels. However, when countries manipulate their standards, FDI can lead to a dirtier environment if the two countries are substantially di¤erent in their valuation of environmental damages.

Research paper thumbnail of External Trade Diversion, Exclusion Incentives and the Nature of Preferential Trade Agreements

Research paper thumbnail of Preferential versus multilateral trade liberalization and the role of political economy

European Economic Review, 2015

Research paper thumbnail of Inter-regional Competition, Comparative Advantage, and Environmental Federalism

In this paper, we compare endogenous environmental policy setting with centralized and decentrali... more In this paper, we compare endogenous environmental policy setting with centralized and decentralized governments when regions have comparative advantages in different polluting goods. We develop a two-region, two-good model with inter-regional environmental damages and perfect competition in product markets, where both regions produce both goods. Despite positive spillovers of pollution across regions, the model predicts that decentralization may lead to

Research paper thumbnail of On the relationship between tariff levels and the nature of mergers

This paper employs an endogenous merger formation approach in a two-country oligopoly model of tr... more This paper employs an endogenous merger formation approach in a two-country oligopoly model of trade to examine the international linkages between the nature of mergers and tariff levels. Firms sell differentiated products and compete in a Bertrand fashion in product markets. We find two effects playing key roles in determining equilibrium market structure: the tariff saving effect and the protection

Research paper thumbnail of Inter-regional competition, comparative advantage and environmental federalism

Canadian Journal of Economics/Revue canadienne d'économique, 2014

In this paper, we compare endogenous environmental policy setting with centralized and decentrali... more In this paper, we compare endogenous environmental policy setting with centralized and decentralized governments when regions have comparative advantages in di¤erent polluting goods. We develop a tworegion, two-good model with inter-regional environmental damages and perfect competition in product markets, where both regions produce both goods. Despite positive spillovers of pollution across regions, the model predicts that decentralization may lead to weaker or stricter environmental standards or taxes, depending on the degree of regional comparative advantage and the extent of transboundary pollution. This suggests that federalism can lead to either a "race to the bottom" or a "race to the top," without relying on ine¢ cient lobbying e¤orts or capital competition.

Research paper thumbnail of Free Trade Agreements versus Customs Unions: Implications for Global Free Trade

Research paper thumbnail of Essays on the Linkages Between Industry Structure and Trade Liberalization

Research paper thumbnail of Environmental Protection Standards and International Trade Policy

Abstract We critically examine the implications of the most favored nation (MFN) clause under asy... more Abstract We critically examine the implications of the most favored nation (MFN) clause under asymmetric environmental standards. Using an oligopolistic intra" industry trade model, we show that tariff discrimination leads to an environmentally beneficial trade ...