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Trade protection and market power: evidence from US antidumping and countervailing duties

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  • Laura Rovegno

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Abstract

Contingent protection measures were originally intended to protect domestic producers from what were considered to be “unfairly” cheap imports. However, due to the way in which these policies are designed and implemented, they have been heavily criticised for their greatly disruptive effects on markets, and particularly on competition. The analysis presented in this paper contributes to the debate by studying the impact of US antidumping (AD) and countervailing (CV) duties on domestic producers’ price-cost margins (PCM). To this end, the study takes advantage of a long panel of 4-digit industries in the United States covering 26 years of AD/CV activity, including the periods before and after the changes to AD/CV laws introduced following the Uruguay Round (UR). It finds evidence of a positive effect of AD/CV duties on PCM for the period prior to the UR, but the effect seems to disappear in the years following the UR. The analysis accounts for potential endogeneity in AD/CV duties, as well as the intensity of the protection granted. Copyright Kiel Institute 2013

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Bibliographic Info

Article provided by Springer in its journal Review of World Economics.

Volume (Year): 149 (2013)
Issue (Month): 3 (September)
Pages: 443-476

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Handle: RePEc:spr:weltar:v:149:y:2013:i:3:p:443-476

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Keywords: Contingent protection; Antidumping; Countervailing duties; Import tariff; Markup; Price-cost margin; Market power; Uruguay Round; C33; D22; D43; F12; F13;

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Cited by:
  1. Laura ROVEGNO, 2013. "Endogenous trade restrictions and exporters’ pricing," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2013023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  2. Michel DE VROEY, 2013. "What can civil society expect from academic macroeconomics?," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2013022, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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