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Endogenous trade restrictions and exporters’ pricing

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  • Laura ROVEGNO

    () (University of Luxembourg)

Abstract

This paper analyses the effect of antidumping (AD) duties on the pricing behaviour of exporters targeted with these measures. Using product and firm-level data for South Korea, the study provides evidence of increased export unit values and firms’ markups following the imposition of AD ad valorem duties. These findings are consistent with the hypothesis that, unlike other import tariffs, AD duties are not absorbed by exporters. The results on firms’ average markups also suggest that the price adjustment following the imposition of AD duties occurs mostly through the export price, and not through reductions in the exporter’s home price. The analysis controls for the presence of other trade measures as well as the endogeneity in AD and other contingent protection measures.

Suggested Citation

  • Laura ROVEGNO, 2013. "Endogenous trade restrictions and exporters’ pricing," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2013023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:2013023
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    File URL: http://sites.uclouvain.be/econ/DP/IRES/2013023.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Stefan Kühn & Christian Viegelahn, 2017. "Foreign trade barriers and jobs in global supply chains," Working Papers 1705, Council on Economic Policies.

    More about this item

    Keywords

    Endogenous trade policy; Import tariffs; Ad valorem duties; Antidumping; Markup; Unit values; Contingent protection;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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