Abstract

http://ssrn.com/abstract=347480
 
 

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Does Antidumping Protection Raise Market Power? Evidence from Firm Level Data


Jozef Konings


Catholic University of Leuven (KUL) - LICOS - Centrum voor Transitie-economie; Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

Hylke Vandenbussche


Catholic University of Leuven (KUL), LICOS & CEPR

October 2002

CEPR Discussion Paper No. 3571

Abstract:     
This paper empirically tests the effects of Anti-Dumping (AD) protection on the price-cost margin 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. Our findings indicate that price-cost margins in most cases significantly increase in the period of protection compared to a period before protection. In industries where competition is very tough before protection, we fail to find an increase in price-cost margins, while in industries with positive mark-ups before protection, trade policy raises market power 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.

Number of Pages in PDF File: 41

Keywords: market power, price-cost markups, antidumping cases, European producers

JEL Classification: F13, L13, L41

working papers series


Date posted: November 1, 2002  

Suggested Citation

Konings, Jozef and Vandenbussche, Hylke, Does Antidumping Protection Raise Market Power? Evidence from Firm Level Data (October 2002). CEPR Discussion Paper No. 3571. Available at SSRN: http://ssrn.com/abstract=347480

Contact Information

Jozef Konings (Contact Author)
Catholic University of Leuven (KUL) - LICOS - Centrum voor Transitie-economie ( email )
Deberiotstraat, 34
Leuven, B-3000
Belgium
+32 16 326 589 (Phone)
+32 16 326 599 (Fax)
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Hylke Vandenbussche
Catholic University of Leuven (KUL), LICOS & CEPR ( email )
Faculty of Economics
Naamsestraat 69
B-3000 Leuven, 3000
Belgium
+32 16 326 920 (Phone)
+32 16 326 732 (Fax)
HOME PAGE: http://www.econ.kuleuven.be/public/NDBAD40/
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