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Subsidizing Rent-Seeking: Antidumping Protection and the Byrd Amendment

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  • Kara M. Olson

    (American University)

Abstract

Theoretical comparisons of the welfare consequences of tariffs, subsidies and import licenses have relied on the assumption that firms reap no private benefits from the imposition of a tariff. This paper conducts an empirical analysis of whether a recent change in U.S. antidumping law known as the Byrd Amendment bestows private benefits to firms lobbying for tariff protection and, thus, increases the level of rent-seeking in the United States. The results provide strong evidence that industries have chosen to lobby for more tariff protection, or filed more antidumping petitions, since passage of the Byrd Amendment. However, there is less evidence that the number of firms filing these petitions increased under the law. This suggests that the Byrd Amendment only partially alleviates the incentive to free-ride.

Suggested Citation

  • Kara M. Olson, 2004. "Subsidizing Rent-Seeking: Antidumping Protection and the Byrd Amendment," International Trade 0407005, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpit:0407005
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    References listed on IDEAS

    as
    1. Blonigen, Bruce A. & Bown, Chad P., 2003. "Antidumping and retaliation threats," Journal of International Economics, Elsevier, vol. 60(2), pages 249-273, August.
    2. Rodrik, Dani, 1986. "Tariffs, subsidies, and welfare with endogenous policy," Journal of International Economics, Elsevier, vol. 21(3-4), pages 285-299, November.
    3. Potters, Jan & Sloof, Randolph, 1996. "Interest groups: A survey of empirical models that try to assess their influence," European Journal of Political Economy, Elsevier, vol. 12(3), pages 403-442, November.
    4. Kara M. Olson, 2004. "Free Riders Among the Rent-Seekers: A Model of Firm Participation in Antidumping Petitions," International Trade 0404009, University Library of Munich, Germany.
    5. Michael M. Knetter & Thomas J. Prusa, 2021. "Macroeconomic factors and antidumping filings: evidence from four countries," World Scientific Book Chapters, in: Thomas J Prusa (ed.), Economic Effects of Antidumping, chapter 8, pages 153-169, World Scientific Publishing Co. Pte. Ltd..
    6. Pecorino, Paul, 1998. "Is There a Free-Rider Problem in Lobbying? Endogenous Tariffs, Trigger Strategies, and the Number of Firms," American Economic Review, American Economic Association, vol. 88(3), pages 652-660, June.
    7. Choi, E. Kwan & Harrigan, James, 2003. "Handbook of International Trade," Staff General Research Papers Archive 11375, Iowa State University, Department of Economics.
    8. Bruce A. Blonigen & Thomas J. Prusa, 2001. "Antidumping," NBER Working Papers 8398, National Bureau of Economic Research, Inc.
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    10. Rodrik, Dani, 1995. "Political economy of trade policy," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 28, pages 1457-1494, Elsevier.
    11. Takacs, Wendy E, 1981. "Pressures for Protectionism: An Empirical Analysis," Economic Inquiry, Western Economic Association International, vol. 19(4), pages 687-693, October.
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    Cited by:

    1. Seung-Hyun Lee & Yoon-Suk Baik, 2010. "Corporate Lobbying in Antidumping Cases: Looking into the Continued Dumping and Subsidy Offset Act," Journal of Business Ethics, Springer, vol. 96(3), pages 467-478, October.
    2. Benjamin H. Liebman & Kara M. Reynolds, 2006. "The returns from rent‐seeking: campaign contributions, firm subsidies and the Byrd Amendment," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(4), pages 1345-1369, November.
    3. Avsar, Veysel, 2014. "Partisanship and antidumping," Economic Modelling, Elsevier, vol. 38(C), pages 190-195.
    4. Philip G. Gayle & Thitima Puttitanun, 2009. "Has the Byrd Amendment Affected US Imports?," The World Economy, Wiley Blackwell, vol. 32(4), pages 629-642, April.
    5. Kara M. Reynolds, 2005. "Anticipated versus Realized Benefits: Can Event Studies Be Used To Predict the Impact of New Regulations?," International Trade 0512005, University Library of Munich, Germany.
    6. Benjamin Liebman & Kasaundra Tomlin, 2015. "World Trade Organization sanctions, implementation, and retaliation," Empirical Economics, Springer, vol. 48(2), pages 715-745, March.

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    More about this item

    Keywords

    antidumping; Byrd Amendment; rent-seeking; free-riding; trade protection;
    All these keywords.

    JEL classification:

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

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