IDEAS home Printed from https://ideas.repec.org/p/lic/licosd/12202.html
   My bibliography  Save this paper

Does Antidumping Protection raise Market Power of Domestic Firms? Evidence from Firm Level Data

Author

Listed:
  • Jozef Konings
  • Hylke Vandenbussche

Abstract

This paper estimates how anti-dumping (AD) protection affects the market power of firms. To this end, we use a rich panel data set of 1,666 EU producers that were involved in AD cases initiated in 1996 to estimate markups of price over marginal cost. Our findings indicate that markups in most cases increase significantly in the period when firms enjoy AD protection compared to a period before protection. In industries where competition is very tough before protection, we fail to find an increase in markups, while in industries with some market power before protection, trade policy raises markups between 3% points and 15 % points, depending on the sector. Our results are robust to alternative specifications and estimation techniques. Our findings are also consistent with recent theoretical models that deal with the economic effects of firm behavior in response to AD protection

Suggested Citation

  • Jozef Konings & Hylke Vandenbussche, 2002. "Does Antidumping Protection raise Market Power of Domestic Firms? Evidence from Firm Level Data," LICOS Discussion Papers 12202, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  • Handle: RePEc:lic:licosd:12202
    as

    Download full text from publisher

    File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp122.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    2. Basu, Susanto & Fernald, John G, 1997. "Returns to Scale in U.S. Production: Estimates and Implications," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 249-283, April.
    3. Harrison, Ann, 1991. "The new trade protection : price effects of antidumping and countervailing measures in the United States," Policy Research Working Paper Series 808, The World Bank.
    4. Markusen, James R. & Venables, Anthony J., 1988. "Trade policy with increasing returns and imperfect competition : Contradictory results from competing assumptions," Journal of International Economics, Elsevier, vol. 24(3-4), pages 299-316, May.
    5. Fischer, Ronald D., 1992. "Endogenous probability of protection and firm behavior," Journal of International Economics, Elsevier, vol. 32(1-2), pages 149-163, February.
    6. Bruce A. Blonigen & Thomas J. Prusa, 2001. "Antidumping," NBER Working Papers 8398, National Bureau of Economic Research, Inc.
    7. Goldberg, Pinelopi Koujianou & Knetter, Michael M., 1999. "Measuring the intensity of competition in export markets," Journal of International Economics, Elsevier, vol. 47(1), pages 27-60, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    market power; price-cost markups; antidumping cases; European producers;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lic:licosd:12202. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/licosbe.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.