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Antidumping protection and productivity of domestic firms: a firm-level analysis

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  • KONINGS, Jozef
  • VANDENBUSSCHE, Hylke

Abstract

We analyze the relationship between Antidumping (AD) Protection and the productivity of EU domestic firms in import-competing industries. For this purpose we identify a panel of domestic firms between 1993 and 2003 that at some point during this period are affected by AD initiations. Using a difference-in-difference approach, we find that AD measures result in improvements ofmeasured productivity for domestic firms. Total Factor Productivity (TFP) of protected firms increases by 2% in the short-run and by 5% to 13% in the long-run. However, there is substantial heterogeneity across firms. The effect of protection depends on the initial "distance-to-the-frontier firm" in the industry. While protection raises TFP of "laggard" domestic firms, it lowers TFP for "efficient" firms that operate close to the efficiency frontier. These results are consistent with recent theoretical work supporting the view that trade policy, under certain conditions, can induce technological catching-up. While this paper evaluates the effectiveness of AD policy it does not engage in a welfare analysis.

Suggested Citation

  • KONINGS, Jozef & VANDENBUSSCHE, Hylke, 2007. "Antidumping protection and productivity of domestic firms: a firm-level analysis," LIDAM Discussion Papers CORE 2007064, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2007064
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp2007.html
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    Cited by:

    1. Jan Van Hove, 2010. "Variety and quality in intra‐European manufacturing trade: the impact of innovation and technological spillovers," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(1), pages 43-59.
    2. Jan Van Hove, 2010. "Variety and quality in intra-European manufacturing trade: the impact of innovation and technological spillovers," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(1), pages 43-59.

    More about this item

    Keywords

    total factor productivity; antidumping protection; technological catching-up;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables

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