Antidumping Protection and Productivity of Domestic Firms : A firm level analysis
AbstractWe 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 a some point during this period are affected by AD initiations. Using a difference-in-difference approach, we find that AD measures result in improvements of measured 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.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2007028.
Date of creation: 01 Sep 2007
Date of revision:
Other versions of this item:
- Jozef Konings & Hylke Vandenbussche, 2007. "Antidumping Protection and Productivity of Domestic Firms: A firm level analysis," LICOS Discussion Papers 19607, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
- KONINGS, Jozef & VANDENBUSSCHE, Hylke, 2007. "Antidumping protection and productivity of domestic firms: a firm-level analysis," CORE Discussion Papers 2007064, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-09-30 (All new papers)
- NEP-BEC-2007-09-30 (Business Economics)
- NEP-COM-2007-09-30 (Industrial Competition)
- NEP-EFF-2007-09-30 (Efficiency & Productivity)
- NEP-INT-2007-09-30 (International Trade)
- NEP-REG-2007-09-30 (Regulation)
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