LICOS Discussion Paper No. 176/2006
37 Pages Posted: 28 Nov 2006
Date Written: August 2006
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.
Keywords: Firm data, Markups, Safeguards, Steel industry, Trade deflection
JEL Classification: F13, L13, L61
Suggested Citation: Suggested Citation
Vandenbussche, Hylke and Zarnic, Ziga, Did US Safeguard Protection on Steel Affect Market Power of European Steel Producers? (August 2006). LICOS Discussion Paper No. 176/2006. Available at SSRN: https://ssrn.com/abstract=947447 or http://dx.doi.org/10.2139/ssrn.947447