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Did US Safeguard Protection on Steel Affect Market Power of European Steel Producers?

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  • Hylke Vandenbussche
  • Ziga Zarnic

Abstract

This paper empirically investigates the effects of US safeguard protection on steel imports in 2002 on the mark-ups of EU steel producers. We identify a large panel of European steel producers between 1995 and 2004 affected by the safeguards. Using the Roeger method, our results show that US safeguards significantly reduced EU firms?mark-ups. Single-product EU steel firms suffered relatively more from the protection than multi-product firms. Controlling for firm heterogeneity, these results are robust to alternative specifications. Our evidence further suggests that US protection resulted in some rerouting of European steel especially towards China, aggravating the situation on the Chinese steel market and ultimately resulting in Chinese trade protection of steel imports.

Suggested Citation

  • Hylke Vandenbussche & Ziga Zarnic, 2006. "Did US Safeguard Protection on Steel Affect Market Power of European Steel Producers?," LICOS Discussion Papers 17606, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  • Handle: RePEc:lic:licosd:17606
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    File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp176.pdf
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    References listed on IDEAS

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    Cited by:

    1. Victoria Purice, 2011. "Exports and Firm Productivity. The effect of US steel safeguards," Bruges European Economic Research Papers 19, European Economic Studies Department, College of Europe.

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    More about this item

    Keywords

    Firm data; Markups; Safeguards; Steel industry; Trade deflection;
    All these keywords.

    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
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics

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