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Antidumping Protection and Productivity Growth of Domestic Firms

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  • Konings, Jozef
  • Vandenbussche, Hylke

Abstract

In this Paper we provide empirical evidence that Antidumping (AD) Protection can induce technological catching-up by domestic firms affected by the import protection. We identify a panel of 1,793 import-competing domestic firms between 1993 and 2000, directly affected by AD cases that were initiated in 1996. Using a difference-in-difference approach, we find evidence of increased Total Factor Productivity (TFP) growth for firms protected by AD measures compared to firms that did not receive protection. Our analysis indicates, however, that the effect of protection depends on the ‘distance to the frontier firm’ in the industry. While protection raises TFP growth of ‘laggard’ firms, the reverse holds for domestic firms that are close to the efficiency frontier. These results confirm recent theoretical work supporting the view that protection can induce technological catching-up.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4620.

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Date of creation: Sep 2004
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Handle: RePEc:cpr:ceprdp:4620

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Related research

Keywords: antidumping protection; c20; technological catching-up; Total Factor Productivity;

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Cited by:
  1. Stähler, Frank & Raff, Horst & Long, Ngo Van, 2007. "The Effects of Trade Liberalization on Productivity and Welfare: The Role of Firm Heterogeneity, R&D and Market Structure," Economics Working Papers 2007,20, Christian-Albrechts-University of Kiel, Department of Economics.
  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 & Francis Journals, vol. 13(1), pages 43-59.
  3. Miyagiwa, Kaz & Ohno, Yuka, 2007. "Dumping as a signal of innovation," Journal of International Economics, Elsevier, vol. 71(1), pages 221-240, March.
  4. Yevgeniya Shevtsova, 2012. "International Trade and Productivity: Does Destination Matter?," Discussion Papers 12/18, Department of Economics, University of York.
  5. Meredith Crowley, 2006. "Why are safeguards needed in a trade agreement?," Working Paper Series WP-06-06, Federal Reserve Bank of Chicago.

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