Current trend of protectionism

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Table of Contents

Chapter 1: Introduction- 3

Advantages of Protectionism- 4

Disadvantages of Protectionism- 4

Research Hypothesis 5

Importance of the study- 5

Research Motivation- 5

Research methodology- 6

Chapter 2: Literature Review- 8

Chapter 3: Research methodology- 19

Introduction- 19

Research design- 20

Hypothesis 22

Population- 22

Population validity- 23

Sample- 23

Sampling instrument 24

Simple random sampling methods 24

Data collection method- 24

Questionnaires 25

Construction Questionnaire by the Researcher 26

Data processing- 28

Data analysis technique- 28


Chapter 1: Introduction

According Jagdish, MIT Press to protectionism refers to the policies that are made and set by a specific countries’ government with the aim of protecting the local industries from competition by the foreign companies. These policies are usually made in the sector of trade. Alan (2004) explains that, trade refers to the process of exchanging goods for money or with anything else with value. Protectionism does not take within a country; it takes place between countries, and thus the importance of studying International trade. Arbache, Dickerson, and Green (2004) add that, international trade refers to selling of products for money across the borders of several countries. Barriers of trade can be divided into qualitative and quantitative. Quantitative barriers are measurable, and they include quotas, tariffs, subsidies, limitations and exchange control. Qualitative barriers are very hard to because they are regulations that are made by the government to make free trade difficult. The regulations can be direct or indirect. Example is competition policy and quality standards (Douglas, 2011). The research seeks to investigate the current trend in protectionism and whether it has any impact on the trade and growth in the developing nations with India as a case study.

According to Went (2000) tariff on the manufactured goods has considerably reduced over the years as is (UNCTAD). The tariffs are known to have between 1996 and 2006 in the developed and the developing economies. The developing economies accounts for BRICs, which Russia, China, South Africa, India and Brazil. It is however important to note that. However, the emerging market share increased from 5% in 1990 to 14% in 2006, with that of the developed nations declining. Important to note, even with the decline of the tariffs, the developing nations have been putting high tariffs on the manufactured products (Smith, 2001).

 

Tennenbaum (2000) tariffs may not be representative of the protectionism in the right percentage because; ablest to make an increment in tariffs with a large percentage because they are part of the World Trade Organization agreements which disallow them to do so. So, Non-tariff barriers become the best measure of protectionism in developing countries. Example of these types of barriers is the export barriers. The government may decide to make production cheaper for the local producers so that it can protect them from foreign company’s competition. In short, Non-tariff barriers are the barriers set to safeguard the local companies by the government though they are not easily quantified.

Advantages of Protectionism

Beyer, Rojas, and Vergara (1999) give the first advantage of protectionism for developing countries is that, it leads to securing the employment positions for the residents. When goods from the foreign countries are taxed highly, then the local companies will do well-leading to employment security for many within the industries.

The second advantage is that, the local companies will produce more; this will lead to increased revenues. Increased revenues for the local industries are good for the economy of the country because, it translates to better living standards for everyone in the country (Moses, 2002).

Disadvantages of Protectionism

According to Tennenbaum (2000), the first disadvantage is that, Protectionism is not best for developing countries because, when it is allowed, a country will levy high taxes to imported goods, leading to high living standards which do not favor the poor citizens. It is because; even the local companies will higher their prices because of the increased importation cost, making live expensive within the developing countries.

The second disadvantage is that it will lead to a heightened level of poverty because of the high unemployment levels (Jagdish, MIT Press). This is especially to the exporting country because they will not have a chance to sell what they have to the foreign market, which will lead to reduced profitability and a possible closure of the company. The end product is that the employees will lose their jobs.

Research Hypothesis

This research is designed to identify and evaluate the current trend of protectionism and highlight possible effects of growth and trade of developing countries with India as a case study.

Importance of the study

To identify and evaluate the current trends of protectionism.

To determine the existence of protectionism in the developing countries with India as a case under study.

To find out the underlying economic and political conditions which inform protectionism in the developing countries?

To determine the effects of the current trend on the growth and trend of developing countries with India as a case study.

Research Motivation

Protectionism was strongly embraced before the Crisis of 1930’s which was culminated by the 2008 and the introduction of WTO, but things changed (Chul et al., 2012). Most of the countries are embracing free trade. Most of the economists indicate that the most-likely period for a country to embrace barriers is during such crisis, yet most countries were not seen to do so. The economist point out on the advantages and disadvantages of barriers at such a time. There those countries that embraced the policies during the 1930 have to safeguard their economies from the crisis. The result was countries that had problems with their balance of payment and loss of more jobs. Most countries thereafter did not embrace this strategy, and to be keen the developing countries. India was one which sought for help from IMF to settle their debts, but out of the rules IMF had set from the study they had done, India had to embrace free trade (David, Wyn, & Peter, 2001).

The aspect of how protectionism brought in many misfortunes and key to India; is the motivation to investigating its current trend and if it has any effects to the developing nations, with India as the focus. Protectionism can be good or bad to the developing nations depending on why they are embracing it. When embracing protectionism, the exporting country, and the importing country usually get benefits and demerits as well. It is important for the practicing nations to know how to practice it while at the same time securing the employment of its citizens and relations with other countries.

Research methodology

Bhattacharyya (2006) explains that, research design is the most-central part of a research because it gives a direction on how and where a research will be conducted. This particular study will embrace the cross-sectional study design, which refers to the collection of data from the target respondents once. The target respondents in this particular study will be from India, that is among the developing countries. The research is meant to highlight the current trend in protectionism and whether it has any impact on the trade and growth in the developing nations, with India as a case study. The research will be quantitative, and that means a sample population will be used to infer to general population of the target destination (Khan, 2008).

The section that follows has discussions and theories on protectionism and trade liberalization as well as the current trend and how they relate to the developing countries. It is a secondary source of data that helps the researcher to determine what has been done in the field previously. It is helpful in determining what has been done, and what is best for the researcher to research on. The secondary information is helpful in that; it will help make comparisons with the primary data (Kothari C. R., 2006). The comparison helps to know if there is any consistency in the area under investigation or if the theories hold.

Chapter 2: Literature Review

According to the observations of historical events, protectionist policies and measures seem the most-favorable option for countries during periods of economic and financial crisis. The first event under observation was the financial crisis which took place during 1929 (Douglas, 2011). During this particular period, most governments opted for the protectionist measures in a bid to protect the industries in their economies from the possible effects of the Great Depression. A portion of the measures were quantitative, and they included increasing import tariffs among others. Economics (2009) gives the insight that, these policies of protectionism led to reduced trade by a percentage of 66 in between the year 1929 and 1933. The countries that were involved in were left with deteriorating economies, something that led to the growth of globalization. Ever since, the economists have been on the run to promote free trade, and most of them are the anti-protectionism from the effects that were witnessed from the actions that were taken by the governments of different countries in 1929 because of the financial crisis.

There are various reasons why countries may opt for protectionism. The first reason is the pressures from producer-oriented groups in the specific countries that they exist. The pressure that is mounted to by these types of groups is meant to secure the groups from intensive competition by foreign companies. The pressure group is usually determined to influence the policies in order they could be in their favor (Eddy, 2005).

Edwards (1992) adds a second reason protectionism could be opted for is because of the government’s decision. The government could make such kinds of decisions when it realizes that it is the only means of protecting national interests. The government may realize that it has depended on other countries very much, and that could be one of the reasons it decides to embrace this as a measure. The other reasons which can make the government take such actions is because of the decision to improve the balance of payments, or because of the plan to increase exports in a bid to grow the economy and lead to a more stable country.

Most of the developing countries had a history of embracing protection measures, but that is since changing. Examples of such countries are Mexico, Chile, Botswana, Ghana, China, and India. Before India becomes a member of World Trade Organization (WTO) which regulates the protectionism, it was charging very high percentage in import tariffs. That was before it introduced its trade reforms in 1991; it was charging 80 percent on the import tariffs, but thereafter they reduced to about 30% (Hakim & Mustapha). Even though it is important to note that, the developing countries can raise their tariffs to a higher percentage compared to the developed countries in relation to the agreement stipulated in the WTO, without them breaking any clause of the agreement. With India as an example, it is reported that its percentage rate on tariffs furthers reduced from the previous 30% to 15%, and they could increase to all high rate of 50% any time they felt like, and still not violate the agreement of WTO (Jagdish, MIT Press).

An explanation as to why more of the developing countries are no longer after protectionism is because of negative effects it has on their economies. Kankesu (2002) elaborates the first reason the developing countries are not supporting the idea of protectionism is because of the idea of poor economic performance. Most of the developing countries have suffered sluggish economic growth and a continuous decline in productivity. Some of the policies under protectionism are commonly known as the macro policies which made the debt level to increase and the external environment. The developing nations thought of this as a solution to ending the scenario and increasing productivity (Alan, 2004).

 

Petia and Amit (2010) elucidate the other reason the developing countries are opting for free trade is because of access to information. In current times, technology, and specifically internet access avails information on what is happening globally and in the international market. The citizens of these developing countries get to realize the gaps in pricing between their countries and the international market. They realize that sometimes, the products in their countries are more expensive than those in the international market, and then they opt to buy from those other countries. In other words, the consumers want to increase the power to buy with the little that they have, and with information, they will go where such desire will be actualized.

Rudiger (1992) adds another reason the developing countries have opted for free trade is because of the research which was conducted by World Bank, and the empirical evidence they got. The research was a comparison of strategies of inward looking trade and outward-looking strategies. The research indicates that, there were problems with the inward looking strategies, and the outward-looking strategies were a success. It is these lessons that led the World Bank to put trade liberalization as a condition for those countries which were in need of money.

The topics of protectionism and free trade have not just started the other day. This topic is one which got the attention long time ago by Classical economists such as David Ricardo. David Ricardo focused on the concept of comparative advantage, and the work and findings were anti-protectionism (Smith, 2001). The explanations are made with the help of two economies (standing for two different countries) with two different sectors each. The results indicate that each of the economies achieves higher productivity if it specializes in those two particular sectors it has as compared to undertaking work in many sectors.

Ever since Ricardo did this work, there has been a series of research from many other researchers to find a relationship between rather liberalization of trade with growth. Rodriguez and Rodrick (2000) explain that, even though the available empirical evidence as provided in most literature is not subject a variety of tests, the main findings from most of them is that tariffs do not increase the welfare of any particular economy; trade liberalization is the only way to enhance the economies. The second study was based on the results as found in the IMF world economic Outlook which had its focus of trade in agriculture. The research realized that there were three effects. Trade protectionism leads to increased taxes and costs to the consumers. The second effect is that it leads to a trend of decline in efficiency because the allocation of the resources is not used in the areas where the country has the expertise. The third effect is that, protectionism could interfere with balance of payments and fiscals and make exports very difficulty (Tennenbaum, 2000). When a country imposes these policies, the other governments retaliate; they develop protectionism measures, and exports decline because they translate to be expensive in those particular countries making it very difficult for the government to make balance of payments. The study further indicates that the world’s income would increase by a tune of USD 128 billion if protectionism were not to be welcome by any country all over the world.

Went (2000) indicates that, financial liberalization has been the other topic under light perhaps because of Asia crisis in the 1990s. Financial liberalization may of great use to a country and it can lead to more investments and general growth of the economy. However, this will only be true if, the country has an enabling environment in terms of the policies that they have crafted. According to Kose et al,. (2006), financial liberalization can be of assistance through leading to better institutions in terms of better governance practices and better-macroeconomic discipline. Evaluating the economic effects of financial liberalization is difficult in most times because the effects keep varying over time.

As illustrates at the start of the literature review, crisis is the major causes for countries to impose protective measures in order to safeguard their economies, and the industries in their economies as well. It is reported that the current economic crisis in the late 2000 has been felt in the developing countries. The economic crisis has led to feverish growth of economies in the developing countries, and it is perceived that the policy makers may give into the political pressures in order to protect their industries from intensive completion of the foreign companies as well as assure citizens of jobs (Beyer, Rojas, & Vergara, 1999). As reported by World Bank and the Center for Economic Policy Research trade barriers have been discovered, even though they are minimal, and they meet the criterion of WTO. The report they gave shows that this situation is not assured to remain at that particular way, and there is possibility that it can escalate in the future.

According to other sources, there is a continuous increase of protectionism in the developing countries such as India because of the global financial crisis which has led to the economic slowdown for quite a while. According to Arbache, Dickerson, and Green (2004) the source argues that in 2009, the data collected for seven months on protectionism shows 186 incidences of restrictions for trade. The trend is recorded to have affected the number of imports made by 0.9% and the global trade by 2.95 in the year 2009. The report gives that protectionism measures implemented by India and other developing countries. The measures specific to each country as the research indicates are listed below.

The measures are since taken at the peak in 2008. India is a country under investigation in this particular study. Because of this particular crisis, India increased their restrictions without any notification. The most-common restrictions in India at that time are the certification that was to be gotten for the new products. Korean companies were investing heavily in India, but ever since the tedious process of getting documentation, most of them opted out (Beyer, Rojas, & Vergara, 1999).

Tennenbaum (2000) explains that the other developing nation to take this action is China. China is the single country with largest percentage of rare earth materials in the world, standing at 95% of the total elements in the earth. Due to this particular crisis, they cited these particular elements as a national element which would be used for strategic reasons, and thus they imposed restrictions on the way they could be used. The reason that they gave to the world was that they were protecting the environment, a reason that was to please, and not the truth. The restrictions included that; no company would import the products of oil from China without it being state owned with the permission of the respective government or with licensing to prove their case. The other restriction was promoting the Chinese founded companies because it offered them a fair deal in the areas ranging from safety, technology and labeling regulations.

The mystery of whether developing countries need to embrace protectionism or free trade should be answered by comparison of the advantages each has over the other. Trade can lead to reduced poverty levels in the developing countries through economic growth. The study that was done in the recent past across 70 countries for a period of 30 years shows that; the countries that had abandoned protectionism for free trade had an increase in income growth, as a result of incremental income (Morone, 2003). The study realized the trend that, all the countries which joined WTO during that particular period lowered their barriers that is that quantitative ones. Example of the barriers reduced includes tariffs and the percentage of taxes. This was the same case in India where the percentage of import taxes went all the way from 80 to 60 after they embraced reforms in 1991. Later on when they became members of WTO, the trend of decreasing the percentage has been continuous until the recent announcement of 15% in the year 2009.

Due to trade liberalization India was able to improve its productivity and led to increasing in efficiency in the way they conducted operations. Trade liberalization opened up for competition which resulted to the Indian companies looking for means to remain competitive from the foreign companies (Petia & Amit, 2010). That way, the citizens of India can access quality products and services at friendly prices because of the healthy competition taking place.

Trade liberalization is full of advantages to the developing countries. The other advantage of lowering tariffs in the developing countries like India is that, they enable them to access better technologies, and inputs necessary in operating some of the companies in their economies at a cheap price (Smith, 2001). Example was when India decided to come up with a reform in the year 1991. The reform was aimed at trading big, and it gave them a chance to enjoy inputs that they would not have enjoyed previously. The report points out that; the inputs that were imported to India were new ones, or rather inputs that they had not imported before. To the amazement of the world, when India embraced the policy, its imports were doubled within a very short period. Some of these inputs were essential of producing new products, better products or increasing the number of products produced previously because of a shortage. This again led to more and better productivity of the Indian companies something which would not have been possible if they still adopted those Protectionism policies. Thus an indication that, protection measures for the developing countries has more bad than good on the contrary of what most people could think (Rudiger, 1992).

Most-developing countries have a high level of poverty as compared to the developed countries. It is good in that case to know if trade and growth have any impact on the level of poverty, and especially to India that according to statistics is among the poor countries in the world. The poverty in India in accordance to World Bank statistics in 2012 was 21.9%, a very high percentage compared to the developed nations. Even though, it is imperative to not that since they adopted the reforms in 1991, the poverty levels have been going down, and indication that free trade is the best idea for developing countries. The statistics according to World Bank show that, the ratio of poverty percentage of the population decreased continuously from 45.3% in 1994, to 37.2% in 2005, to 29.8% in 201, and to the latest percentage in 2012 standing at 21.9%. This can explain the system well that, trade leads to economic growth of a country, which then leads to the creation of employment, and later the levels of poverty are reduced, something proven through the reduced level of dependency (Arbache, Dickerson, & Green, 2004).

It is clear that, even though India enjoyed the fruits of liberalization; it was not out of choice that they opted to adopt the concept of free trade after they realized the need of borrowing some money in the International Monetary Fund (IMF). Moses (2002) elaborates that; IMF would not allow them the money without them trading protectionism for free trade because of the study they had previously conducted as illustrated at some point in this literature. The companies that were evidenced to have got the benefits of a free trade in terms of increased productivity were the Indian companies. So far, no material to support foreign companies getting any improvements in India as a result of the reforms in 1991.

The government of India usually before 1991 carried out the operations of the country as if it was able to survive without help from any other country or any other source, but they were wrong. In 1980’s liberalization was deeply taking root in most countries across the globe, and this led macroeconomic imbalances (Fiscal and balance of payments) for them (Went, 2000). Another global event which made it difficult for India to operate on its own was the increase in oil prices as a result of Gulf war that was unpredicted. This undermined the operations of India, and because of their increased debt and sluggish economy growth, they sought for immediate funding from IMF in 1991.

Further research shows that, not all people across the divide within a country which embraces trade liberalization enjoy its benefits. That again illustrates that, as much as poverty in the developing countries will be minimized, this method does not give any assurance that it will be eliminated. Petia and Amit (2010) explains that, when the government of India embraced free trade out of the measures set by the IMF, poverty declined in a few select areas. Even though, prices of commodities went down, and there was a variety to choose from, there was an issue with the way resources went to different ends. Results indicate that Indians working in protected industries or areas around protected companies suffered most when others were enjoying. The reason is that; they had their salaries, wages and most-other privileges slashed. No more employment opportunities would be availed to the people of the area within which the companies operated as a result of stiff competition from the foreign companies. What made it worse is that, the labor laws in India did not give them a chance to move on to other companies benefiting from the 1991 trade reforms.

 

Information that, employees working in companies which were previously protected and not favored by the trade reforms yet they could not relocate led many researchers to study other reasons that would cause people not to relocate to companies that are favored by the economic situation of the country. Some of the researchers hold that labor market regulation is among the key factors which affect the employment of these new people searching for work. They argue that, the regulations have been made in such a way that it makes expensive for the companies to fire the employees in case they want to. That hinders them from getting the employees, which then contributes to them not moving to these strategic locations to seek for employment. There other researchers report that, they realize that some of the people who lose jobs in the companies which wide up because of an end in protectionism do meet the requirements being sought after by the companies in a free trade scenario (Arbache, Dickerson, & Green, 2004). Some of the previously employed people may lack the education and experience which would usher them in the companies doing well because of the economy without barriers. The other reason from researchers is that these jobs may require those involved to relocate, and moving may be costly, not only in monetary terms, but also in social terms because it requires separation from the loved ones. Trending of loved ones for a job that requires an individual to go far away may be difficult, and they may opt to stay unemployed. These issues can be properly tackled if the government comes up with appropriate policies and measures.

Finally, are the theoretical arguments from researchers on trade liberalization regarding the developing countries? The first argument is that, trade liberalization is the only way that, the companies in the developing countries will realize increased productivity. They argue that, when the developing countries adopt reforms from protectionism, the likely event is that, resources will be reallocated from the less productive to more productive companies (Beyer, Rojas, & Vergara, 1999). In turn, there will be increased productivity as a result of competition. The companies will manage to reach their peak by reducing on the management slack, and focusing on what they do best.

Kankesu (2002) clarifies that, the other theoretical argument is that, these companies will be in a position to getter better technologies that they did not have before. The essence of technologies is that, they will help in technical efficiency. Notable is that, not all of the theories are supportive of trade liberalization. These contrary theories argue that, trade liberalization may lead the developing countries into sectors that are not economically good for growth. They also hold that; trade liberalization cannot be workable unless the government comes up with additional policies.

Chapter 3: Research methodology

Introduction

Research methodology is a chapter which is dedicated to illustrating the design, the method of collecting data, the population used in the research and other relevant topics in relation to the research. This chapter will give the users of the information on the particular method of study, and why it was preferred over other possible means. The chapter will explain the methods that the researcher has used to collect data from the target respondents. The researcher will give the advantages and the disadvantages of using that as a means of collecting data as compared to other possible data collection method. The researcher will then defend the essence of using such method of data collection for the study. Just as an iceberg, the study is aimed to give light to the current trend in protectionism and to know if it impacts trade and growth in the developing nations (Sharan, 2009).

The better part of this particular section in the researcher research is that it is given systematically to give the process of conducting a primary research assuming that, the user of the information does not understand. It will also elaborate the different types of research, and then narrow down to one which is the center of research, so that the information can be easily understood. The findings can only be understood better with proper knowledge of the research methodology; research design, the population, the sample, and how the statistics will be inferred. The chapter is also made to accommodate the discussion of the findings in relation with the literature review. The comparison is meant to know if there is any relationship between the two.

Research design

Many researchers and authors have given different definitions as it regards to research design. Most important is that with the differences that they may have, they all agree that it is an important part in a research. When a researcher gets it wrong at this stage, then the research will give results which are not representative, or they may have difficulties in carrying the research (Bhattacharyya, 2006).

Khan (2008) elaborates that, research is a continuous process which seeks to answer a dozen of questions which do not have any answers, or the available answers are not satisfactory. The other researcher explains that, research is scientific, and the main aim of a research is to seek clarity on the information given regarding a certain subject of interest. So, without an agenda to know more, or get information which was not previously available then from their definitions that do not qualify as a research.

The research is descriptive, meaning that it gives an explanation on the current trend of protectionism and its effect to the developing countries and India for this particular study. There are other types of research other than descriptive; they are exploratory and casual. The research in that particular case has decided to use a sample, and infer the results to the general population of India and its economy as well. Inferring means that, the results gotten from the sample will be assumed to be representative of the population (Kothari C. R., 2006).

Apart from the interest of answering a question or investigating information on an area of interest, there are other purposes that can make a researcher do a research. Kothari C. (2000) explains that, there are those researchers who will do research on already existed topics, and then, the main purpose of such research is to expand the available information of the subject matter. It also helps the people who have an interest in the field to be better informed. The second purpose is necessitated by the fact that there is no background on a topic that the researcher desires to get answers to. Other people may have an interest to such kinds of questions but, all literature will lack this information. In that particular case, the information will be sought to create something new and unique that did not exist before. The other purpose of which can lead a researcher to do research is to know how a particular product or service behaves when it has been ushered into the intended market segment. This is meant to help the researcher to make improvements on what already exists. The final purpose may be informed by the surrounding environment. The environment will include the economic, the political, and the social. The researchers sense for change that has occurred due to one of the factors, and they may be motivated to conduct a research.

The researcher of this particular study did it to fulfill the mandate of the university as a postgraduate requirement as well as to seek knowledge on the topic that has since been interesting to him. These are the purposes which are in line with those given by the (Wayne & Stuart, 2007). They add another purpose of doing a research to be as a way of looking for solutions to problems affecting people on a daily basis.

Apart from fulfilling the expectations of the university; there are those who will want to do research on their own. Paul (2010) explains that, these people do so because of motivation of various reasons. The author categorizes the reasons to be a desire to be known and respected by the people who are around them: they are those who are driven by the vision to do good for the people around them there are those who are those who want to give solutions to problems that have not any; Finally, it is the desire to be in the category of those who will; be referenced by others as having done research.

Hypothesis

Hypothesis is the statement of the problem and identifying whether to reject of accept what it argues. The hypothesis of this study is to know the current trend in protectionism and whether it has any impact on the trade and growth in the developing nations with India as a case study. The hypothesis seeks to elaborate whether current trade of protectionism has any impact in India. If there are effects, then the hypothesis will be positive and worth accepting. It is so if the hypothesis shows that there are no effects, then it is negative and it ought to be rejected.

Population

The researcher had to identify the people who are going to be the base of study. Population is simply the total number of people who make the base of the study. The population in this particular case is the developing countries (Peter, 2003). That is too general,and as said, it is not logical. Why is it not logical to base a study on the developing countries? Well, there are very many developing countries, and it would be next to impossible to get information from all these places. Too, the information cannot be accurate because it will mean that less sample has to be gotten from each of the countries. That is what brings in the essence of the two different categories of population. The first type of population is the target population. The target population is India. That makes it possible to do the research because India is a single entity. However, not all people can be reached in India, because of various reasons such as logistics and regulations. In that case, the second type of population will make sense. It is known as the accessible population. This means that; there is a certain number of people who are reachable in a target population, and those are the ones who make the backbone of this particular study (Rajendar, 2008).

Population validity

Sharan (2009) elaborates that, for the research to be of use, or for it to be viable, and then the population used or the population targeted should be one which has knowledge on the subject base under investigation. In this particular case, the case under study is the current trend of protectionism and if it has any effects to India. There are those who do not understand what protectionism is; there are others who would not have the understanding of whether the trend is what caused certain event to occur. This is the population that will give information that may not be representative, or information that is misleading.

The researcher in that particular case will identify the specific group of the population with the knowledge under investigation. This is to ensure that the information gotten can be used reliably by other researchers when doing their research work. Without which, the aim of the research will not be realizable.

Sample

Can anyone think of the time, cost and energy it could take to reach all the accessible population within the target group? It is strenuous, even though it might give more accurate results. That thought is what brings in the concept of the sample. A sample is the number of people who will be used in this study from the accessible population (Wayne & Stuart, 2007). The researcher will decide to use 100 people as the sample of the research. The results from the sample are inferred to the general population who took were targeted by the study. The sample is gotten through a process known as sampling, even though it will be random to avoid any biases. The above numbers of people who will be targeted for the research are known as the sample size.

Sampling instrument

There has to be a way in which information is collected from the source. The information cannot just be collected without a predetermined way. Bhattacharyya (2006) elucidates that, that way of collecting the information is what is known as sampling instrument. There are many of them, but this particular study will use the questionnaires. The instruments of sampling are usually determined based if data is qualitative or quantitative. Quantitative data refers to that data which is measurable, while quantitative data is the type of data that is not easily measurable. There are no units of measuring it because most of the qualitative are opinions of people, and they are not quantifiable. Questionnaires are representative of quantitative data for qualitative research. That means that the results from the research will be quantifiable.

Simple random sampling methods

The researcher prefers to use simple random sampling because of its many advantages. Most important of all the advantages is that, this type of sampling does not encourage biases as indicates in the earlier section. The results from this kind of sampling will be representative, and they will be the best to use (Khan, 2008).

Data collection method

In the literature review section, that is data collected, but, that is known as a secondary data. It is secondary because it is the evaluation of the works of other people, as much as it may be true; it is second-hand information. This is a particular section which deals with data from the real source, which is referred to as first-hand information (Kothari C., 2000). The name of the first-hand information is primary data. primary data in this particular case is collected by the researcher, so that in the end they may compare and know if the arguments held in the literature review are true, or to expand on the existed information on the current trend of protectionism and effects it has to India if any, and too to identify any other new knowledge which might not have been exposited before in the same area.

Questionnaires

In his work, John (2014) states clearly that; questionnaire are a predetermined questions well thought and printed in order to assist in tackling the research problem. The questions are made to help in tabulating the answers, to give statistical information as it regards to addressing the problem under investigation. The questions used in the questionnaires are of different types. The most-crucial thing to note when coming up with the questionnaires questions is that, they should be related to the thesis, regardless of whether it is direct or if it is indirect.

The researcher will embrace the four different types question types when constructing the questionnaires. The first type of question which the researcher has in the questionnaire is the closed questions (Sharan, 2009). This is the type of questions that do not allow room for opinion from the respondent. The respondent is restricted to a certain answer. Example is the yes or no answer questions. The researchers prefer this type of questions because they are easy to administer and analyze, even though, they are difficult to construct.

According to Wayne and Stuart (2007), the second types of questions that the researcher has in the questionnaire are the open-ended questions. These are the type of questions that give the respondent the room to give their opinion on the problem under investigation. They are good because they help the researcher to receive much information regarding the research problems, and more so, some factors that might have been forgotten when crafting the closed questions. The problem with these specific types of questions is that, the respondents may give irrelevant answers from what the researcher has in mind regarding the study. Too, these questions are time-consuming, and they are difficult to analyze. The responses are many, and most of them are varied, because most people have different opinions on giving answers to this type of questions.

Rajendar (2008) states that, the third type of question in these questionnaires of this research is the contingency questions. These are the type of questions that are known as follow-up, and they are usually fit to be answered by respondents who give a specific response related to the one before that particular one. They are a good type of questions because they give more details on why a respondent has given that particularly response in the preceding question.

According to Peter (2003) the fourth and the last type of question used in constructing questionnaires of the research are the matrix questions. In the questionnaire, there are many matrix questions; that is the comparison of the cultures of China and U.K in a diagram, and the other unrelated questions which share the same responses. The type of questions share the same responses and they are meant to save space in the questionnaire.

Construction Questionnaire by the Researcher

The questionnaire is important in this study because, it is a sampling instrument used to collect the first-hand information for this research. Therefore, it ought to be given the maximum attention possible so that it will give desirable results. The researcher has ensured that; it is simple to be understood by the sample, it is short to ensure that it is understood and that it does not use ambiguous words. Below are the steps that the researcher has formulated to help coming up with the questionnaire of the study.

Rajendar (2008) says that, the first stage in formulating the questionnaire was determining the objectives of the study. They are to identify and evaluate the current trend of protectionism; to determine the existence of protectionism in the developing countries with India as a case under study; to find out the underlying economic and political conditions which inform protectionism in the developing countries? ; and to determine the effects of the current trend on the growth and trend of developing countries with India as a case study.

The second stage the researcher had to formulate the questionnaire within mind that, STATA software would be used to analyze the data. That inspired the researcher of ask more of closed questions than open and matrix questions. The use of such questions makes it key in the available data, and also to analyze it using the analysis tools (Sharan, 2009).

The third stage when developing the questionnaire, the researcher took the consideration of a real situation. It had to cost revision of the questionnaire to ensure that the language used was couched (Bhattacharyya, 2006).

Kothari C. (2000) insinuates the fourth stage, is one of the most critical and important stages. It is informed by the characteristics of a questionnaire as elaborated at the beginning of this subsection. The researcher shortened all long questions and ensured that they made sense to the respondents.

The presentation of one idea in one particular question can be misleading and confusing. In the fifth stage, the researcher had to ensure that, all the questions had different ideas, and that each of them presented a totally different idea.

The final stage was to ensure that none of the questions asked personal questions, or those questions that made the sample size to feel unsecure. The ones who were like that were taken out of the list, and the researcher assured them of confidentiality at the beginning of the questionnaire, because at some point it could be relative (Paul, 2010).

Data processing

In accordance to (Khan (2008) the researcher had to process the information so that it can be useful for use among many searching for knowledge on the field. The following is the process to follow: After the collection of data, it had to be cross-checked by the researcher to assert that there were no errors. That was the first processing step which is common as editing. The researcher assigned numbers to the reply given in the questionnaires. That is the second step common as Coding, which was done with the help of Excel, so that data could be inserted in STATA software. The researchers then grouped all available information into their relevant and relatable areas. That is the third step common as classification. Lastly, the researcher logically planned all the data so that it could be analyzed to derive a sense out of it.

Data analysis technique

Data analysis techniques refer to the method that is used to present primary data so that it can make sense to its users. In other words, it is purposely for converting raw facts into information. Examples of data analysis techniques include the use of pie charts, bar graphs, histograms, regression among possible others (Wayne & Stuart, 2007).

Research methodology is an essential part of this study, without which, no completion would be achieved. It will be helpful for conducting the research, and testing the hypothesis. The following chapter discusses the findings from the research done in the accessible target group from India as explained in the research design.

Chapter 4: Findings

This is the chapter which contains the results from the questionnaires which were given to the sample group randomly. The data has is presented in charts, graphs and codebooks as indicates below. The data is further analyzed to make importance as information which can be used by developing countries governments and economists and most important India.

What is your level of education? * What do you think is the major cause of adopting protectionism Cross tabulation
 What do you think is the major cause of adopting protectionismTotal
To protect local companies from competitionTo respond to a global crisis
What is your level of education?UndergraduateCount06262
% within What is your level of education?0.0%100.0%100.0%
PostgraduateCount191938
% within What is your level of education?50.0%50.0%100.0%
TotalCount1981100
% within What is your level of education?19.0%81.0%100.0%

 

100 percent of the undergraduates who took part in the research held the opinion that the major cause of adopting protectionism is as a way of responding to global crisis. The postgraduate respondents were supportive of both sides because the percentage 50 on the side of protecting the Local companies and on the side of responding to a global crisis. This implies that it is possible that the level of education affects the way personalities think about protectionism.

What is your level of education? * What barriers are more likely to be used in your country? Cross tabulation
 What barriers are more likely to be used in your country?Total
QuantitativeQualitative
What is your level of education?UndergraduateCount273562
% within What is your level of education?43.5%56.5%100.0%
PostgraduateCount38038
% within What is your level of education?100.0%0.0%100.0%
TotalCount6535100
% within What is your level of education?65.0%35.0%100.0%

 

Further statistics indicate that, that India is most likely to use quantitative barriers as compared to qualitative barriers. Quantitative barriers have a total of 65 percent vote from both the undergraduate and the post graduate. The postgraduate have the largest voting of 100percent. This is an implication that if they had the chance to determine what barriers to use, they would have a bias towards quantitative barriers.

What is your level of education? * Do you think WTO has helped curb protectionism? Cross tabulation
 Do you think WTO has helped curb protectionism?Total
YesNo
What is your level of education?UndergraduateCount62062
% within What is your level of education?100.0%0.0%100.0%
PostgraduateCount231538
% within What is your level of education?60.5%39.5%100.0%
TotalCount8515100
% within What is your level of education?85.0%15.0%100.0%

 

The respondents at the category of undergraduate are of the opinion that WTO has helped a great deal to curb protectionism. There opinion accounts for100 percent voting. The postgraduate are of the same opinion, though their rate is a bit lower at 60 percent. This is an indication which is suggestive that the undergraduates are likely to recommend WTO for curbing protectionism as compared to their postgraduate counterparts.

What is your level of education? * Do you think IMF contributed to the end of protectionism in India? Cross tabulation
 Do you think IMF contributed to the end of protectionism in India?Total
YesNo
What is your level of education?UndergraduateCount461662
% within What is your level of education?74.2%25.8%100.0%
PostgraduateCount38038
% within What is your level of education?100.0%0.0%100.0%
TotalCount8416100
% within What is your level of education?84.0%16.0%100.0%

 

The postgraduate were elaborate with a percentage of 100 that IMF is one of the factors which led to end of protectionism in India. The total percentage of opinion of IMF having contributed towards the end of protectionism in India is at 84 percent. This is suggestive that IMF is the main cause of the end of protectionism in India.

What is your level of education? * Has trade liberalization helped to stir trade and growth in India Cross tabulation

 Has trade liberalization helped to stir trade and growth in IndiaTotal
YesNo
What is your level of education?UndergraduateCount60262
% within What is your level of education?96.8%3.2%100.0%
PostgraduateCount33538
% within What is your level of education?7.9%92.1%100.0%
TotalCount6337100
% within What is your level of education?63.0%37.0%100.0%

96.8 percent of the undergraduate think that trade liberalization has helped stir the economy of India. The postgraduate think that it does not helped at all, with a percentage of 92 refusals of such a condition. This is an indication that the undergraduate government officials or economists would recommend trade liberalization, while the postgraduate would recommend protectionism.

What is your level of education? * Does protectionism lead to unemployment? Cross tabulation
 Does protectionism lead to unemployment?Total
YesNo
What is your level of education?UndergraduateCount471562
% within What is your level of education?75.8%24.2%100.0%
PostgraduateCount38038
% within What is your level of education?100.0%0.0%100.0%
TotalCount8515100
% within What is your level of education?85.0%15.0%100.0%

Both the undergraduate and the postgraduate workers were of the opinion that protectionism could lead to unemployment, even though the postgraduate had the highest vote of 100 percent. This is an implication that it could have a negative implication to the economy and general welfare of employees.

The largest total percentage accounted for the buying of inputs from foreign. The percentage total is 45, with the undergraduate with the highest vote of 72.6 percent

What is your level of education? * Do you think protectionism can affect the productivity of India Cross tabulation
 Do you think protectionism can affect the productivity of IndiaTotal
PositivelyNegatively
What is your level of education?UndergraduateCount125062
% within What is your level of education?19.4%80.6%100.0%
PostgraduateCount03838
% within What is your level of education?0.0%100.0%100.0%
TotalCount1288100
% within What is your level of education?12.0%88.0%100.0%

The employees both in undergraduate category and postgraduate agree anonymously that protectionism is not good for productivity of India.

The economist and government officials are of the opinion that adopting protectionism is majorly is as a result of responding to global crisis. Government officials contribute the largest percentage of 100 to the opinion.

 

The largest percentage of the government officials which is 76 argue that qualitative measures are the most likely to be used. The economists’ large percentage of 100 explains that the country is likely to use the quantitative barriers.

 

What is your occupation? * Do you think WTO has helped curb protectionism? Cross tabulation
 Do you think WTO has helped curb protectionism?Total
YesNo
What is your occupation?Government OfficialCount49049
% within What is your occupation?100.0%0.0%100.0%
EconomistCount361551
% within What is your occupation?70.6%29.4%100.0%
TotalCount8515100
% within What is your occupation?85.0%15.0%100.0%

 

The government officials and economists are in consensus that WTO has helped to reduce protectionism. Though, the government officials have 100 percent vote on the same issue as compared to the economist whose votes account for 70.6 percent.

 

What is your occupation? * Do you think IMF contributed to the end of protectionism in India? Cross tabulation
 Do you think IMF contributed to the end of protectionism in India?Total
YesNo
What is your occupation?Government OfficialCount331649
% within What is your occupation?67.3%32.7%100.0%
EconomistCount51051
% within What is your occupation?100.0%0.0%100.0%
TotalCount8416100
% within What is your occupation?84.0%16.0%100.0%

 

The government officials had a less percentage of 63 of those who believed IMF to have contributed to the end of protectionism in India. The economists had the largest percentage of 100 percent who were of the same opinion.

 

 

 

 

 

 

What is your occupation? * Has trade liberalization helped to stir trade and growth in India Cross tabulation
 Has trade liberalization helped to stir trade and growth in IndiaTotal
YesNo
What is your occupation?Government OfficialCount49049
% within What is your occupation?100.0%0.0%100.0%
EconomistCount143751
% within What is your occupation?27.5%72.5%100.0%
TotalCount6337100
% within What is your occupation?63.0%37.0%100.0%

 

The government officials’ total percentages of 100 percent were of the opinion that trade liberalization has helped stir trade and growth in India. The economists were totally opposed to trade liberalization contributing to growth in India. The percentage which represents their no to the statement is 72.5.

What is your occupation? * Does protectionism lead to unemployment? Cross tabulation
 Does protectionism lead to unemployment?Total
YesNo
What is your occupation?Government OfficialCount341549
% within What is your occupation?69.4%30.6%100.0%
EconomistCount51051
% within What is your occupation?100.0%0.0%100.0%
TotalCount8515100
% within What is your occupation?85.0%15.0%100.0%

 

The government officials and the economists were of the opinion that protectionism leads to unemployment even though, the economist had the largest percentage at 100 who supported the statement.

 

The total largest percentage is 45 and it is biased to the idea that India adopted trade liberalization because of getting necessary inputs for production. Government officials contributed the largest percentage of 91.8 to this effect.

 

What is your occupation? * Do you think protectionism can affect the productivity of India Cross tabulation
 Do you think protectionism can affect the productivity of IndiaTotal
PositivelyNegatively
What is your occupation?Government OfficialCount123749
% within What is your occupation?24.5%75.5%100.0%
EconomistCount05151
% within What is your occupation?0.0%100.0%100.0%
TotalCount1288100
% within What is your occupation?12.0%88.0%100.0%

 

The economists and the government officials agree anonymously that protectionism can affect the productivity of India negatively. The economists voted 100 percent on that opinion in comparison to government officials who voted 75.5 percent.

The chapter which follows explains the findings in relation to literature, and it is also the conclusion part.

Chapter 5: Discussions and Conclusion

Most of the findings consist with the literatures in the literature section. Example, the findings indicate that the major reason for adopting the protectionism is because of the global crisis. The economists held that a country is usually more likely to adopt barriers during the times of crisis. The author adds especially the crisis that took occasion in 1930’s and 2008 were factors that would inform governments to adopt protectionism (Douglas, 2011).

The Results are also consisted with the literature in that; WTO is mentioned to be one lead source which discourages barriers. The author elaborates that, the barriers that are likely to be used by countries in the WTO are the technical or the qualitative that cannot be measured. The results of the study support the same ideology in that, the largest percentages both in the cross-tabulation of occupation and education level indicates WTO to have helped a great deal in curbing the protectionism.

The results give a clear indication that, IMF is the main factor which made India forego protectionism for trade liberalization. The largest percentages from the study are biased towards this argument. Beyer, Rojas, and Vergara (1999) indicates that India was in a difficult situation because of the balance of payments. They sought constant help to IMF to fix the problem, but they had to adhere to its guidelines of trade liberalization before it could give into their requests. India because of the position they were in, they did not have a choice other than to embrace trade liberalization that they have practiced ever since to date.

 

The findings also indicate that, protectionism is not good for the economy of a developing country, especially India. This is because it leads to increased numbers of unemployment. In the two cross tabulation scenarios, the case was similar in that the largest total percentage explains protectionism to cause unemployment. Eddy (2005) gives that unemployment causes poverty, and it leads to a reduced trade and growth of the economy. The authors indicate that India is one of the countries which are poverty stricken, even though, since they embraced trade liberalization, the cases of poverty have declined gradually.

Protection has gradually lost essence in countries which want to spur trade and growth, and especially the developing countries. Trade and growth lead to improved living standards, reduced poverty levels, and distribution of wealth evenly. The two are only realizable in the case of trade liberalization. Protectionism protects the companies in the economy from competition, but the citizens of the country suffer most. Reason is that, when the local companies do not face competition, they end up producing poor quality products and at very high prices. Trade liberalization makes inputs and new technologies available to a developing country to increase productivity and safeguard its citizens from exploitation.

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