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Did US Safeguard Protection on Steel Affect Market Power of European Steel Producers?Hylke VandenbusscheUniversité Catholique de Louvain, IRES, CORE, LICOS-KUL and CEPR; Catholic University of Leuven (KUL), LICOS & CEPR Ziga ZarnicOrganization for Economic Co-Operation and Development (OECD) August 2006 LICOS Discussion Paper No. 176/2006 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.
Number of Pages in PDF File: 37 Keywords: Firm data, Markups, Safeguards, Steel industry, Trade deflection JEL Classification: F13, L13, L61 working papers seriesDate posted: November 28, 2006Suggested CitationContact Information
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