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Trade protection and market power: evidence from US antidumping and countervailing duties

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  • Laura Rovegno

Abstract

Contingent protection measures were originally intended to protect domestic producers from what were considered to be “unfairly” cheap imports. However, due to the way in which these policies are designed and implemented, they have been heavily criticised for their greatly disruptive effects on markets, and particularly on competition. The analysis presented in this paper contributes to the debate by studying the impact of US antidumping (AD) and countervailing (CV) duties on domestic producers’ price-cost margins (PCM). To this end, the study takes advantage of a long panel of 4-digit industries in the United States covering 26 years of AD/CV activity, including the periods before and after the changes to AD/CV laws introduced following the Uruguay Round (UR). It finds evidence of a positive effect of AD/CV duties on PCM for the period prior to the UR, but the effect seems to disappear in the years following the UR. The analysis accounts for potential endogeneity in AD/CV duties, as well as the intensity of the protection granted. Copyright Kiel Institute 2013

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  • Laura Rovegno, 2013. "Trade protection and market power: evidence from US antidumping and countervailing duties," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(3), pages 443-476, September.
  • Handle: RePEc:spr:weltar:v:149:y:2013:i:3:p:443-476
    DOI: 10.1007/s10290-013-0160-7
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    Cited by:

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    3. Michael Moore, 2015. "Sanctuary markets and antidumping: an empirical analysis of U.S. exporters," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(2), pages 309-328, May.
    4. Chen, Zhisong & Su, Shong-Iee Ivan, 2022. "Countervailing effect and mitigation policy: A game-theoretical study in dual international competing photovoltaic supply chains," Renewable Energy, Elsevier, vol. 183(C), pages 160-171.
    5. Laura ROVEGNO, 2013. "Endogenous trade restrictions and exporters’ pricing," LIDAM Discussion Papers IRES 2013023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    6. Laura Rovegno, 2013. "Endogenous trade restrictions and exporters’ pricing behaviour," LICOS Discussion Papers 34213, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    7. Michel DE VROEY, 2013. "What can civil society expect from academic macroeconomics?," LIDAM Discussion Papers IRES 2013022, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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    More about this item

    Keywords

    Contingent protection; Antidumping; Countervailing duties; Import tariff; Markup; Price-cost margin; Market power; Uruguay Round; C33; D22; D43; F12; F13;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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