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Heterogeneous responses of firms to trade protection

  • Konings, Jozef
  • Vandenbussche, Hylke

This paper estimates the effect of antidumping protection on the productivity of domestic import-competing firms. Two key results emerge. First, the productivity of the average firm receiving protection moderately improves, but this is never sufficient to close the productivity gap with firms never involved in antidumping cases. Second, allowing for firm heterogeneity reveals that domestic firms with relatively low initial productivity - laggard firms - have productivity gains during protection, while firms with high initial productivity - frontier firms - experience productivity losses during protection. These results are consistent with recent theories showing that trade policy affects firms differently depending on their initial productivity.

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Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 76 (2008)
Issue (Month): 2 (December)
Pages: 371-383

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Handle: RePEc:eee:inecon:v:76:y:2008:i:2:p:371-383
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505552

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  1. Vandenbussche, H. & Zanardi, M., 2006. "The Global Chilling Effects of Antidumping Proliferation," Discussion Paper 2006-12, Tilburg University, Center for Economic Research.
  2. Ederington, Josh & McCalman, Phillip, 2008. "Endogenous firm heterogeneity and the dynamics of trade liberalization," Journal of International Economics, Elsevier, vol. 74(2), pages 422-440, March.
  3. Miyagiwa, K. & Ohno, Y., 1993. "Closing the Technology Gap Under Protection," Discussion Papers in Economics at the University of Washington 93-09, Department of Economics at the University of Washington.
  4. Jan De Loecker, 2004. "Do Exports Generate Higher Productivity? Evidence from Slovenia," LICOS Discussion Papers 15104, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  5. Bruce A. Blonigen & Jee-Hyeong Park, 2000. "Dynamic Pricing in the Presence of Antidumping Policy: Theory and Evidence," University of Oregon Economics Department Working Papers 2001-1, University of Oregon Economics Department, revised 01 Jul 2001.
  6. Vandenbussche, Hylke & Veugelers, Reinhilde, 1996. "European Anti-dumping Policy and the Profitability of National and International Collusion," CEPR Discussion Papers 1469, C.E.P.R. Discussion Papers.
  7. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-97, November.
  8. Levinsohn, J., 1991. "Testing the Imports-As-Market-Discipline Hypothesis," Working Papers 272, Research Seminar in International Economics, University of Michigan.
  9. Amiti, Mary & Konings, Jozef, 2005. "Trade Liberalization, Intermediate Inputs and Productivity: Evidence from Indonesia," CEPR Discussion Papers 5104, C.E.P.R. Discussion Papers.
  10. Hillman, Arye L, 1982. "Declining Industries and Political-Support Protectionist Motives," American Economic Review, American Economic Association, vol. 72(5), pages 1180-87, December.
  11. Boone, J., 2000. "Competitive pressure : The effects on investments in product and process innovation," Other publications TiSEM 88418185-7603-4c36-92fd-3, Tilburg University, School of Economics and Management.
  12. Johannes Van Biesebroeck, 2003. "Exporting Raises Productivity in Sub-Saharan African Manufacturing Plants," NBER Working Papers 10020, National Bureau of Economic Research, Inc.
  13. Benjamin H. Liebman, 2006. "Safeguards, China, and the Price of Steel," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 142(2), pages 354-373, July.
  14. Elhanan Helpman, 2006. "Trade, FDI, and the Organization of Firms," Harvard Institute of Economic Research Working Papers 2118, Harvard - Institute of Economic Research.
  15. Thomas J. Prusa, 1997. "The Trade Effects of U.S. Antidumping Actions," NBER Chapters, in: The Effects of U.S. Trade Protection and Promotion Policies, pages 191-214 National Bureau of Economic Research, Inc.
  16. repec:dgr:kubcen:200612 is not listed on IDEAS
  17. Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers.
  18. Niels, Gunnar, 2000. " What Is Antidumping Policy Really About?," Journal of Economic Surveys, Wiley Blackwell, vol. 14(4), pages 467-92, September.
  19. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
  20. Harrison, Ann E., 1994. "Productivity, imperfect competition and trade reform : Theory and evidence," Journal of International Economics, Elsevier, vol. 36(1-2), pages 53-73, February.
  21. Tybout, James R. & Westbrook, M. Daniel, 1995. "Trade liberalization and the dimensions of efficiency change in Mexican manufacturing industries," Journal of International Economics, Elsevier, vol. 39(1-2), pages 53-78, August.
  22. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
  23. Budd, John W. & Konings, Jozef & Slaughter, Matthew J., 2002. "Wages and International Rent Sharing in Multinational Firms," IZA Discussion Papers 560, Institute for the Study of Labor (IZA).
  24. Prusa, Thomas J., 1992. "Why are so many antidumping petitions withdrawn?," Journal of International Economics, Elsevier, vol. 33(1-2), pages 1-20, August.
  25. Head, Keith & Ries, John, 1999. "Rationalization effects of tariff reductions," Journal of International Economics, Elsevier, vol. 47(2), pages 295-320, April.
  26. repec:ner:tilbur:urn:nbn:nl:ui:12-84400 is not listed on IDEAS
  27. Baltagi, Badi H. & Wu, Ping X., 1999. "Unequally Spaced Panel Data Regressions With Ar(1) Disturbances," Econometric Theory, Cambridge University Press, vol. 15(06), pages 814-823, December.
  28. Jacques Mairesse & Jordi Jaumandreu, 2005. "Panel-data Estimates of the Production Function and the Revenue Function: What Difference Does It Make?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(4), pages 651-672, December.
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