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Heterogeneous responses of firms to trade protection

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  • KONINGS, Jozef
  • VANDENBUSSCHE, Hylke

Abstract

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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Suggested Citation

  • KONINGS, Jozef & VANDENBUSSCHE, Hylke, 2009. "Heterogeneous responses of firms to trade protection," LIDAM Reprints CORE 2112, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:2112
    DOI: 10.1016/j.jinteco.2008.08.002
    Note: In : Journal of International Economics, 76, 371-383, 2008
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    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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