Free Riders Among the Rent-Seekers: A Model of Firm Participation in Antidumping Petitions
AbstractThis research expands upon the current theoretical literature on the political economy of trade policy by empirically estimating the degree of rent-seeking in the presence of free riding. The results provide strong evidence that the level of trade protection awarded to industries is significantly influenced by political factors, including the number of firms that actively participate in a collective action. However, fewer firms participate in collective actions in industries characterized by either a large number of firms or high concentration levels because the free rider problem becomes more severe. I estimate a model of firm participation in antidumping petitions using a panel of U.S. petition filings and outcomes between 1980 and 1996. After estimating the parameters of the model, I simulate the impact of specific changes in U.S. antidumping law and find that even small changes in the private returns to participating in this rent-seeking activity will dramatically change the level of trade protection in the economy.
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Bibliographic InfoPaper provided by EconWPA in its series International Trade with number 0404009.
Length: 35 pages
Date of creation: 29 Apr 2004
Date of revision:
Note: Type of Document - pdf; pages: 35
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antidumping; rent-seeking; free riding; collective actions; trade policy;
Find related papers by JEL classification:
- F1 - International Economics - - Trade
- F2 - International Economics - - International Factor Movements and International Business
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- Kara M. Reynolds, 2009. "Overcoming Free Riding: A Cross Country Analysis of Firm Participation in Antidumping Petitions," Working Papers 2009-01, American University, Department of Economics.
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