Tariffs and Quotas Essay Example | Topics and Well Written Essays - 3250 words

Tariffs and Quotas - Essay Example There are many basic similarities between the tariff and the quota, particularly in the way they both relate directly to economic relations within and without a nation; there are several basic differences as well, however, which determine which of these strategies should be employed in any particular situation. Figure 1 lists the ways in which tariffs and quotas and the same and different. Originally speaking, tariffs were imposed in early empires and principalities; ancient Germanic, Slavic and Arabic societies imposed tariffs on imported goods to protect their own established, small economies while simultaneously strengthening trading ties and making beneficial political and economic connections with other parts of the world (Heichelheim, 1957, p. 111). It was the foresight of ancient society leaders that has led to the current state of international trade and helped formulate the basis for contemporary economics. Revenue tariffs essentially help to maintain the structure of a local economy despite the influx of foreign goods and produce; some countries have little income and must rely on tariffs to keep their economies stable (Howard, 2001, p.226). Quotas were introduced in cultures such as the Az... the establishment of the Soviet Union as a way to unite the workers and ensure that everyone was doing their part to keep the economy running (Vaillant, 1962, p.190; Ellman and Kontorovich, 1998, p.221). The idea of the tariff is also quite ancient because since the very beginning of human society there has always existed competition between different groups of people. Despite friendly relations, certain products and produce that is available to one group may not be available to the other, and so trade is a natural occurrence between communities, cities, regions and countries. Figure 1 Tariffs and Quotas ' ' ' ' ' ' ' ' ' ' ' * Can pertain to international trade ' ' ' * Responsible for national revenue ' ' ' * Regulate local economy ' SIMILARITIES ' * Regulate international economy ' ' ' * Both can strengthen international trade ties ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' * Tariffs are always used in terms of ' ' ' international trade, whereas; ' DIFFERENCES ' * Quotas may relate directly to internal ' ' production ' ' ' * Tariffs can greatly impact foreign economy ' ' * Quotas create revenue for local sellers ' ' * Tariffs create revenue for the government ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' The Tariff Strictly speaking, a tariff is the tax that is placed on a foreign import upon its entry into another country. There are three basic types of tariff: revenue, protective and prohibitive tariffs. Each of these serves a specific purpose within the economy and is responsible for bringing in money from different market sectors with overseas origins. The imposition of tariffs on various imported goods ensures that the nation that imports

The Impact of Capital Structure on the Firms Performance Essay

The Impact of Capital Structure on the Firms Performance - Essay Example The authors of this paper are professors Murray Frank and Vidnan Goyal. Frank is one of the faculties of commerce in the University of British Columbia, Canada. While Goyal is in the department of finance in Hong Kong University of Science and Technology. They empirically tested 39 factors that affect leverage decisions of publicly traded companies in the U.S. One of the major findings is that the bankruptcy risk and profitability are negatively related to leverage. Their findings support tax-bankruptcy trade-off theory and stakeholder co-investment theory. On the other hand, it conflicts with the studies that are based on the pecking order theory and market timing theory. The authors are reliable and present good knowledge of the topic. Although theories are conflicting with some other research this is the good scholarly source. This source contributed more than enough in research work and target audience of the source is financial institutions, professionals, students, and stockhol ders. Bas, T., Muradoglu, G. & Phylaktis, K. (2009). Determinants of Capital Structure in Developing Countries. Retrieved March 15, 2011, from European Financial Management Association: http://efmaefm.org/0EFMSYMPOSIUM/China-2010/papers/determinants%20of%20capital%20structure%20in%20developing%20countries.pdf The authors of this paper are the faculty of Cass Business School in London. ... This paper is different than previous studies since it focuses on the large firms of developing countries. This paper contributed to research to some extent because it helped in understanding the fact that how different markets react differently. The audience of the paper is financial associations and foreign companies. This paper is included because it’s a scholarly and popular work and facts of the paper are well documented. Although my topic I too focused and this research is on a different topic this paper helped me to support my ideas. Titman, S., & Wessels, R. (1988). The Determinants of Capital Structure Choice. The Journal of Finance, 43 (1). The authors of this paper are professors at the University of California, Los Angeles. Both writers presented their research in a well-documented manner and this research is reliable and good to include when someone is working on the topic of capital structure. The study examined capital structure theories that have not tested bef ore based on a factor analytic technique. They analyzed the data using six measures of financial leverage including short-term debt, long-term debt, and convertible debt. The study findings show that the transaction cost is one of the major determinants of capital structure choice. In fact, the results do not support the effect of volatility, collateral value or future growth. This journal is very much related to my topic although it's too broad and not scholarly enough it helped a lot to narrow down my topic. The audience of the paper is students, teachers, and people who are seeking basic knowledge about the determinants of capital structure. Sbeiti, W. (2010).