Are All Trade Protection Policies Created Equal? Empirical Evidence for Nonequivalent Market Power Effects of Tariffs and Quotas

35 Pages Posted: 9 Oct 2010

See all articles by Bruce A. Blonigen

Bruce A. Blonigen

University of Oregon - Department of Economics; National Bureau of Economic Research (NBER)

Benjamin H. Liebman

St. Joseph's University

Justin R. Pierce

Board of Governors of the Federal Reserve System

Wesley W. Wilson

University of Oregon - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 1, 2010

Abstract

The steel industry has been protected by a wide variety of trade policies, both tariff- and quota-based, over the past decades. This extensive heterogeneity in trade protection provides the opportunity to examine the well-established theoretical literature predicting nonequivalent effects of tariffs and quotas on domestic firms' market power. Robust to a variety of empirical specifications with U.S. Census data on the population of U.S. steel plants from 1967-2002, we find evidence for significant market power effects for binding quota-based protection, but not for tariff-based protection. There is only weak evidence that antidumping protection increases market power.

Keywords: Market structure, Nonequivalence of tariffs and quotas, VRAs, Antidumping, Mini-mills

JEL Classification: F13, F23, L11

Suggested Citation

Blonigen, Bruce A. and Liebman, Benjamin H. and Pierce, Justin R. and Wilson, Wesley W., Are All Trade Protection Policies Created Equal? Empirical Evidence for Nonequivalent Market Power Effects of Tariffs and Quotas (September 1, 2010). US Census Bureau Center for Economic Studies Paper No. CES-WP-10-27, Available at SSRN: https://ssrn.com/abstract=1688331 or http://dx.doi.org/10.2139/ssrn.1688331

Bruce A. Blonigen

University of Oregon - Department of Economics ( email )

1285 University of Oregon
Eugene, OR 97403
United States
541-346-4680 (Phone)
541-346-1243 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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Benjamin H. Liebman

St. Joseph's University ( email )

5600 City Avenue,
Philadelphia, PA 19131
United States

Justin R. Pierce (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

HOME PAGE: http://www.justinrpierce.com/

Wesley W. Wilson

University of Oregon - Department of Economics ( email )

1285 University of Oregon
Eugene, OR 97403
United States
541-346-4690 (Phone)

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