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The Byrd Amendment as Facilitating a Tacit International Business Collusion

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Author Info
Yoshitomo Ogawa
Yoshiyasu Ono

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Abstract

We analyze the effect of the Byrd Amendment, which amended the US Tariff Act of 1930 to allow revenue from antidumping duties to be distributed to domestic import-competing firms. In an international duopoly framework it is shown that it urges the home firm to restrict output so that the foreign firm increases output and that revenue from the duties increases. Consequently, not only the home firm but also the foreign firm can be better off while only consumers are worse off. Home total surplus increases if the foreign rival firm is much more efficient, but otherwise decreases.

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Paper provided by Institute of Social and Economic Research, Osaka University in its series ISER Discussion Paper with number 0647.

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Date of creation: Jan 2006
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Handle: RePEc:dpr:wpaper:0647

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  1. Konings, Jozef & Vandenbussche, Hylke, 2005. "Antidumping protection and markups of domestic firms," Journal of International Economics, Elsevier, vol. 65(1), pages 151-165, January. [Downloadable!] (restricted)
  2. Staiger, Robert W. & Wolak, Frank A., 1992. "The effect of domestic antidumping law in the presence of foreign monopoly," Journal of International Economics, Elsevier, vol. 32(3-4), pages 265-287, May. [Downloadable!] (restricted)
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  3. Lahiri, Sajal & Ono, Yoshiyasu, 1988. "Helping Minor Firms Reduces Welfare," Economic Journal, Royal Economic Society, vol. 98(393), pages 1199-1202, December. [Downloadable!] (restricted)
  4. Prusa, Thomas J., 1992. "Why are so many antidumping petitions withdrawn?," Journal of International Economics, Elsevier, vol. 33(1-2), pages 1-20, August. [Downloadable!] (restricted)
  5. Krishna, Kala, 1989. "Trade restrictions as facilitating practices," Journal of International Economics, Elsevier, vol. 26(3-4), pages 251-270, May. [Downloadable!] (restricted)
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  6. Ono, Yoshiyasu, 1984. "Profitability of export restraint," Journal of International Economics, Elsevier, vol. 16(3-4), pages 335-343, May. [Downloadable!] (restricted)
  7. Anderson, Simon P. & Schmitt, Nicolas & Thisse, Jacques-Francois, 1995. "Who benefits from antidumping legislation?," Journal of International Economics, Elsevier, vol. 38(3-4), pages 321-337, May. [Downloadable!] (restricted)
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  8. David R. Collie & Hylke Vandenbussche, 2004. "Anti-dumping Duties and the Byrd Amendment," LICOS Discussion Papers 14904, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
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  9. Reitzes, James D, 1993. "Antidumping Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(4), pages 745-63, November. [Downloadable!] (restricted)
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