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Free Riders Among the Rent-Seekers: A Model of Firm Participation in Antidumping Petitions

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  • Kara M. Olson

    (American University)

Abstract

This research expands upon the current theoretical literature on the political economy of trade policy by empirically estimating the degree of rent-seeking in the presence of free riding. The results provide strong evidence that the level of trade protection awarded to industries is significantly influenced by political factors, including the number of firms that actively participate in a collective action. However, fewer firms participate in collective actions in industries characterized by either a large number of firms or high concentration levels because the free rider problem becomes more severe. I estimate a model of firm participation in antidumping petitions using a panel of U.S. petition filings and outcomes between 1980 and 1996. After estimating the parameters of the model, I simulate the impact of specific changes in U.S. antidumping law and find that even small changes in the private returns to participating in this rent-seeking activity will dramatically change the level of trade protection in the economy.

Suggested Citation

  • Kara M. Olson, 2004. "Free Riders Among the Rent-Seekers: A Model of Firm Participation in Antidumping Petitions," International Trade 0404009, EconWPA.
  • Handle: RePEc:wpa:wuwpit:0404009
    Note: Type of Document - pdf; pages: 35
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    File URL: http://econwpa.repec.org/eps/it/papers/0404/0404009.pdf
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    References listed on IDEAS

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    1. Berry, Steven T, 1992. "Estimation of a Model of Entry in the Airline Industry," Econometrica, Econometric Society, vol. 60(4), pages 889-917, July.
    2. Eric J. Bartelsman & Wayne Gray, 1996. "The NBER Manufacturing Productivity Database," NBER Technical Working Papers 0205, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Reynolds, Kara M., 2006. "Subsidizing rent-seeking: Antidumping protection and the Byrd Amendment," Journal of International Economics, Elsevier, vol. 70(2), pages 490-502, December.
    2. Kara M. Reynolds, 2009. "Overcoming Free Riding: A Cross Country Analysis of Firm Participation in Antidumping Petitions," Working Papers 2009-01, American University, Department of Economics.
    3. Nelson, Douglas, 2006. "The political economy of antidumping: A survey," European Journal of Political Economy, Elsevier, vol. 22(3), pages 554-590, September.
    4. Aradhna Aggarwal, 2008. "Anti-dumping Protection: Who Gets It? An Exploratory Analysis of Anti-dumping Use in the Most Active User Countries," Working Papers id:1374, eSocialSciences.

    More about this item

    Keywords

    antidumping; rent-seeking; free riding; collective actions; trade policy;

    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business

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