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The Effects Of The 1996 U.S.-Canada Softwood Lumber Agreement On The Industrial Users Of Lumber: An Event Study




"In this article, we analyze whether the Softwood Lumber Agreement between the United States and Canada imposed significant economic costs on industries that use softwood lumber in the United States. To ascertain this impact, we use an event study. Our event study analyzes variations in the stock prices of lumber-using firms listed at the major stock markets in the United States. We find that the news of events leading to the Softwood Lumber Agreement had significant negative impacts on the stock prices of industries using softwood lumber. The average reduction of stock prices for our sample of firms was approximately 5.42% over all the events considered. (JEL F13, F23)" Copyright (c) 2009 Western Economic Association International.

Suggested Citation

  • Nisha Malhotra & Sumeet Gulati, 2010. "The Effects Of The 1996 U.S.-Canada Softwood Lumber Agreement On The Industrial Users Of Lumber: An Event Study," Contemporary Economic Policy, Western Economic Association International, vol. 28(2), pages 275-287, April.
  • Handle: RePEc:bla:coecpo:v:28:y:2010:i:2:p:275-287

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    References listed on IDEAS

    1. Ross, Stephen A, 1978. "The Current Status of the Capital Asset Pricing Model (CAPM)," Journal of Finance, American Finance Association, vol. 33(3), pages 885-901, June.
    2. William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, September.
    3. John S. Hughes & Stefanie Lenway & Judy Rayburn, 1997. "Stock Price Effects of U.S. Trade Policy Responses to Japanese Trading Practices in Semi-conductors," Canadian Journal of Economics, Canadian Economics Association, vol. 30(4), pages 922-942, November.
    4. Ries, John C, 1993. "Windfall Profits and Vertical Relationships: Who Gained in the Japanese Auto Industry from VERs?," Journal of Industrial Economics, Wiley Blackwell, vol. 41(3), pages 259-276, September.
    5. Joy Begley & John Hughes & Judy Rayburn & David Runkle, 1998. "Assessing the Impact of Export Taxes on Canadian Softwood Lumber," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 207-219, February.
    6. Hartigan, James C & Perry, Philip R & Kamma, Sreenivas, 1986. "The Value of Administered Protection: A Capital Market Approach," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 610-617, November.
    7. Benjamin H. Liebman & Kasaundra M. Tomlin, 2007. "Steel safeguards and the welfare of U.S. steel firms and downstream consumers of steel: a shareholder wealth perspective," Canadian Journal of Economics, Canadian Economics Association, vol. 40(3), pages 812-842, August.
    8. Karafiath, Imre, 1988. "Using Dummy Variables in the Event Methodology," The Financial Review, Eastern Finance Association, vol. 23(3), pages 351-357, August.
    9. Boehmer, Ekkehart & Masumeci, Jim & Poulsen, Annette B., 1991. "Event-study methodology under conditions of event-induced variance," Journal of Financial Economics, Elsevier, vol. 30(2), pages 253-272, December.
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    Cited by:

    1. Huang, Xuan & An, Haizhong & Fang, Wei & Gao, Xiangyun & Wang, Lijun & Sun, Xiaoqi, 2016. "Impact assessment of international anti-dumping events on synchronization and comovement of the Chinese photovoltaic stocks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 459-469.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business


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