ABSTRACT
What effects are important in evaluating policies that restrict access to the domestic market and rely upon import protection as a form of export promotion? As suggested in general terms above, such a strategy may be successful as a result of allowing domestic producers to achieve economies of scale or reduce costs through learning by doing. The profits that can be earned in a protected home market may allow domestic producers to expand capacity and deter competitors from expanding. Because the significance of these factors cannot be demonstrated in the abstract, we again turn to a numerical calculation that takes into account these various effects.
