It is argued that the estimation techniques used by previous researchers to study rivalry in financial markets are inappropriate. The assumptions of both ordinary least-squares and Tobi analysis are violated when these techniques are used to analyze mobility and turnover data. To overcome the difficulties in the previous studies, we suggest a non-linear model (which is closely related to the Poisson model). This model is designed for describing frequency data and is not subject to the criticisms to which ordinary least-square and Tobut are subject.

Using four-digit manufacturing data from 1975 on nominal and effective tariff protection and nontariff barriers to trade (NTBs), we estimate the structural determinants of protection imposed by the United States, Japan, the European Community and Canada in the Post-Kennedy Round period. We provide evidence that NTBs were used to undercut Kennedy Round liberalization in general and to supplement tariff protection of consumer goods, agricultural manufactures and textiles. Industrialized country NTBs discriminate against manufactured exports from developing countries. We explain that discrimination and the pervasive use of NTBs in the EC in terms of our regulatory theory of trade.