Protectionism and Platform Revenues
Joint work with Gianmarco Ottaviano (Bocconi University) and Tommaso Sonno (University of Bologna).
We document three episodes of structural acceleration in the economic weight of digital platforms: a regulatory regime change after the Arab Spring, the 2018 differential tariff sparing of technology manufacturing, and a post-2017 revenue divergence in which platforms outpace not only the rest of the market but also the very technology sectors that were spared from the tariffs. We then show that platforms can mechanically gain from import tariffs even absent preferential political, fiscal, or regulatory treatments. In an open economy with ad valorem platform commissions levied on the tariff-inclusive consumer price, platform revenue rises with the tariff if and only if the demand elasticity is low enough.
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