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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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  • Bruce Blonigen
  • Benjamin H. Liebman
  • Justin R. Pierce
  • Wesley W. Wilson

Abstract

Over the past decades, the steel industry has been protected by a wide variety of trade policies, both tariff- and quota-based. We exploit this extensive heterogeneity in trade protection 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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16391.

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Date of creation: Sep 2010
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Publication status: published as Blonigen, Bruce A. & Liebman, Benjamin H. & Pierce, Justin R. & Wilson, Wesley W., 2013. "Are all trade protection policies created equal? Empirical evidence for nonequivalent market power effects of tariffs and quotas," Journal of International Economics, Elsevier, vol. 89(2), pages 369-378.
Handle: RePEc:nbr:nberwo:16391

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  1. Bruce A. Blonigen & Benjamin H. Liebman & Wesley W. Wilson, 2007. "Trade Policy and Market Power: The Case of the US Steel Industry," NBER Working Papers 13671, National Bureau of Economic Research, Inc.
  2. Kee, Hiau Looi & Hoekman, Bernard, 2003. "Imports, entry, and competition law as market disciplines," Policy Research Working Paper Series 3031, The World Bank.
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  4. Durling, James P. & Prusa, Thomas J., 2006. "The trade effects associated with an antidumping epidemic: The hot-rolled steel market, 1996-2001," European Journal of Political Economy, Elsevier, vol. 22(3), pages 675-695, September.
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  7. Falvey, Rodney E, 1979. "The Composition of Trade within Import-restricted Product Categories," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 1105-14, October.
  8. Bown, Chad P., 2013. "How different are safeguards from antidumping ? evidence from us trade policies toward steel," Policy Research Working Paper Series 6378, The World Bank.
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  14. Michael O. Moore, 1996. "Steel Protection in the 1980s: The Waning Influens of Big Steel?," NBER Chapters, in: The Political Economy of American Trade Policy, pages 73-132 National Bureau of Economic Research, Inc.
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  19. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
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  24. repec:fth:stanho:e-89-20 is not listed on IDEAS
  25. Kim, Euysung, 2000. "Trade liberalization and productivity growth in Korean manufacturing industries: price protection, market power, and scale efficiency," Journal of Development Economics, Elsevier, vol. 62(1), pages 55-83, June.
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Cited by:
  1. Collard-Wexler, Allan & De Loecker, Jan, 2013. "Reallocation and Technology: Evidence from the U.S. Steel Industry," CEPR Discussion Papers 9331, C.E.P.R. Discussion Papers.
  2. Bown, Chad P., 2013. "How different are safeguards from antidumping ? evidence from us trade policies toward steel," Policy Research Working Paper Series 6378, The World Bank.
  3. Bruce Blonigen & Benjamin Liebman & Wesley Wilson, 2013. "Antidumping and Production-Line Exit: The Case of the US Steel Industry," Review of Industrial Organization, Springer, vol. 42(4), pages 395-413, June.

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