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Are Antidumping Duties for Sale? Case-Level Evidence on the Grossman-Helpman Protection for Sale Model

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  • Carolyn L. Evans

    ()
    (Department of Economics, Santa Clara University, 500 El Camino Real,Santa Clara, CA 95053, USA)

  • Shane M. Sherlund

    ()
    (Board of Governors of the Federal Reserve System, Washington, DC 20551, USA)

Abstract

Do contributions to politicians affect trade policy? To examine this question, we have compiled a new, unique database containing information on political donations by the specific firms and labor organizations that have petitioned for antidumping protection from imports, as well as data on the outcomes of their requests. Using an empirical framework based on the Grossman and Helpman (1994) “protection for sale” model, we examine the relationship between antidumping decisions and political activism. Our results indicate that money does matter. We find that politically active petitioners are more likely to receive protection and that antidumping duty rates tend to be higher for that group. In addition, the relationship between the import penetration ratio and duties imposed depends on whether or not petitioners are politically active—antidumping duties are positively correlated with the import penetration ratio for politically inactive petitioners but negatively correlated for politically active petitioners, consistent with the Grossman-Helpman model's predictions.

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Bibliographic Info

Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 78 (2011)
Issue (Month): 2 (October)
Pages: 330-357

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Handle: RePEc:sej:ancoec:v:78:2:y:2011:p:330-357

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  1. Facchini, Giovanni & van Biesebroeck, Johannes & Willmann, Gerald, 2003. "Protection for Sale with Imperfect Rent Capturing," Economics Working Papers 2004,01, Christian-Albrechts-University of Kiel, Department of Economics.
  2. Joseph F. Francois & Gunnar Niels, 2004. "Political Influence in a New Antidumping Regime: Evidence from Mexico," Tinbergen Institute Discussion Papers 04-011/2, Tinbergen Institute.
  3. Bruce A. Blonigen, 2006. "Evolving discretionary practices of U.S. antidumping activity," Canadian Journal of Economics, Canadian Economics Association, vol. 39(3), pages 874-900, August.
  4. Bombardini, Matilde, 2008. "Firm heterogeneity and lobby participation," Journal of International Economics, Elsevier, vol. 75(2), pages 329-348, July.
  5. Theo Eicher & Thomas Osang, 2002. "Protection for Sale: An Empirical Investigation: Comment," American Economic Review, American Economic Association, vol. 92(5), pages 1702-1710, December.
  6. Bruce A. Blonigen & Thomas J. Prusa, 2001. "Antidumping," NBER Working Papers 8398, National Bureau of Economic Research, Inc.
  7. Benjamin H. Liebman & Kara M. Reynolds, 2006. "The returns from rent-seeking: campaign contributions, firm subsidies and the Byrd Amendment," Canadian Journal of Economics, Canadian Economics Association, vol. 39(4), pages 1345-1369, November.
  8. Robert M. Feinberg, 2005. "U.S. Antidumping Enforcement and Macroeconomic Indicators Revisited: Do Petitioners Learn?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 141(4), pages 612-622, December.
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