This paper describes the effects of a temporary increase in tariffs on the performance and behavior of U.S. manufacturers. Using antidumping duties as an example of temporary protection, I compare the responses of protected manufacturers to those predicted by models of trade with heterogeneous firms. I find that apparent increases in revenue productivity associated with antidumping duties are primarily due to increases in prices and mark-ups, as physical productivity falls among protected plants. Moreover, antidumping duties slow the reallocation of resources from less productive to more productive uses by reducing product-switching behavior among protected plants.
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Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number
09-38.
Find related papers by JEL classification: F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations F14 - International Economics - - Trade - - - Country and Industry Studies of Trade D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
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