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Are All Trade Protection Policies Created Equal? Empirical Evidence for Nonequivalent Market Power Effects of Tariffs and Quotas

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Author Info

  • Bruce Blonigen
  • Benjamin Liebman
  • Justin Pierce
  • Wesley Wilson

Abstract

The steel industry has been protected by a wide variety of trade policies, both tariff- and quota-based, over the past decades. This extensive heterogeneity in trade protection provides the opportunity to examine the well-established theoretical literature predicting nonequivalent effects of tariffs and quotas on domestic firms' market power. Robust to a variety of empirical specifications with U.S. Census data on the population of U.S. steel plants from 1967-2002, we find evidence for significant market power effects for binding quota-based protection, but not for tariff-based protection. There is only weak evidence that antidumping protection increases market power.

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File URL: ftp://ftp2.census.gov/ces/wp/2010/CES-WP-10-27.pdf
File Function: First version, 2010
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Bibliographic Info

Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 10-27.

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Length: 35 pages
Date of creation: Sep 2010
Date of revision:
Handle: RePEc:cen:wpaper:10-27

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Keywords: Market structure; Nonequivalence of tariffs and quotas; VRAs; Antidumping; Mini-mills;

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References

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Cited by:
  1. Allan Collard-Wexler & Jan De Loecker, 2012. "Reallocation and Technology: Evidence from the U.S. Steel Industry," Working Papers 1402, Princeton University, Department of Economics, Center for Economic Policy Studies..
  2. Chad Bown, 2013. "How Different Are Safeguards from Antidumping? Evidence from US Trade Policies Toward Steel," Review of Industrial Organization, Springer, vol. 42(4), pages 449-481, June.

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