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Import Protection, Export Promotion, and Product Positioning
Author(s) -
Stefanadis Christodoulos
Publication year - 1998
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00129
Subject(s) - competitor analysis , argument (complex analysis) , mainstream , promotion (chess) , product (mathematics) , business , market share , appeal , domestic market , home market , international economics , economics , international trade , commerce , industrial organization , market economy , marketing , politics , biochemistry , chemistry , philosophy , geometry , theology , mathematics , political science , law
The argument that import protection may lead to export promotion is examined from the marketing standpoint. The model shows that protection allows home firms to cover a larger portion of the domestic market than they otherwise would and to target market segments that are closer to the mainstream. At the same time, foreign competitors are forced to retreat to more idiosyncratic market segments of narrower appeal. Thus, protection gives home firms a product positioning advantage over their foreign rivals; this advantage translates into higher market share and profits—not only in the protected home market, but also in export markets.