Strategic use of import protection: Seeking shelter for competitive advantage

Abstract

The purpose of this paper is to develop a new analytic perspective on the strategic use of trade policy. It argues that a firm level of analysis utilizing the value chain concept provides new insights into business-government relations on trade and protection. The paper identifies three patterns in which product market competition and positioning spill over into the political “market” for protection. It discusses how, when industry conditions permit, both U.S. and foreign firms attempt to use the technical track of import protection in the United States not simply to gain shelter from foreign exporters, but also as an extension of their overall business strategy. The incentive for making strategic use of protection arises when firms adopt different configurations in arranging their operating activities along the larger domestic and international value-added chain of production and distribution. These circumstances make it unlikely that protection will have an equivalent impact on all producers, and seeking protection therefore can be an effective competitive tactic.

Citation

Salorio, E. (1994), "Strategic use of import protection: Seeking shelter for competitive advantage", Research in Global Strategic Management (Research in Global Strategic Management, Vol. 4), Emerald Group Publishing Limited, Leeds, pp. 101-124. https://doi.org/10.1016/S1064-4857(93)04008-Y