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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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Bibliographic Info

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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Cited by:
  1. 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.
  2. 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.
  3. Chad P. Bown, 2004. "How Different Are Safeguards from Antidumping? Evidence from US Trade Policies Toward Steel," Econometric Society 2004 North American Summer Meetings 434, Econometric Society.

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