Are Antidumping Duties for Sale? Case-Level Evidence on the Grossman-Helpman Protection for Sale Model

40 Pages Posted: 28 Feb 2007 Last revised: 22 Jul 2013

See all articles by Carolyn L. Evans

Carolyn L. Evans

Intel Corporation

Shane M. Sherlund

Federal Reserve Board of Governors

Date Written: June 23, 2008

Abstract

As successive rounds of global trade liberalization have lowered broad industry-level tariffs, antidumping duties have emerged as a WTO-consistent means of protecting certain industries. We construct a new dataset linking anti-dumping-case outcomes to political donations byt he politcal action committees (PACs) associatred with petitioners filing the cases. Using an emperical framework based on the Grossman and Helpman (1994) "protection for sale" model, we examine the relationship between antdumbing decisions and the political contributions of petitioners. Despite the fact that the antidumping decision is intended to emerge from a pureluy adminstrative process, our results show that antidumping duty rates tend to be higher forpolitically-active petitioners. In addition, the relationship between the import penetration ratio and duties impsed dependson whether or not petitioners in a case are politically active. Consistent with the predictions of the Grossman-Helpman model, antidumping duties are positively correlated with the import penetration ratio for politically inactive petitioners, but negatively correlated for politically active petitioners.

Keywords: Trade policy, Antidumping, Political economy

JEL Classification: F13

Suggested Citation

Evans, Carolyn L. and Sherlund, Shane M., Are Antidumping Duties for Sale? Case-Level Evidence on the Grossman-Helpman Protection for Sale Model (June 23, 2008). FRB International Finance Discussion Paper No. 888. Available at SSRN: https://ssrn.com/abstract=965761 or http://dx.doi.org/10.2139/ssrn.965761

Carolyn L. Evans (Contact Author)

Intel Corporation ( email )

United States

Shane M. Sherlund

Federal Reserve Board of Governors ( email )

20th and C Streets, NW
Mailstop 93
Washington, DC 20551
United States
202-452-3589 (Phone)
202-728-5887 (Fax)

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