Antidumping Protection and Productivity of Domestic Firms : A firm level analysis

We analyze the relationship between Antidumping (AD) Protection and the productivity of EU domestic firms in import-competing industries. For this purpose we identify a panel of domestic firms between 1993 and 2003 that a some point during this period are affected by AD initiations. Using a difference-in-difference approach, we find that AD measures result in improvements of measured productivity for domestic firms. Total Factor Productivity (TFP) of protected firms increases by 2% in the short-run and by 5% to 13% in the long-run. However, there is substantial heterogeneity across firms. The effect of protection depends on the initial “distance-to-the-frontier firm” in the industry. While protection raises TFP of “laggard” domestic firms, it lowers TFP for “efficient” firms that operate close to the efficiency frontier. These results are consistent with recent theoretical work supporting the view that trade policy, under certain conditions, can induce technological catching-up. While this paper evaluates the effectiveness of AD policy it does not engage in a welfare analysis.

International Rent Sharing in Multinational Firms

We use a unique firm-level panel data set of multinational parents and their foreign affiliates to analyze whether profits are shared across borders within multinational firms. Using both fixed-effects and generalized method-of-moments estimators, affiliate wage levels are estimated to respond to both affiliate and parent profitability. The elasticity of affiliate wages to parent profits per worker is approximately 0.03, which can explain over 20 percent of the observed variation in affiliate wages. These results reveal a previously ignored aspect of labor-market rent sharing. They also reveal an important micro-level linkage with potential macro-level implications. International rent sharing can transmit economic conditions across national borders, and can thereby provide an implicit cross-country risk-sharing mechanism.

Antidumping protection hurts exporters: firm-level evidence

This paper estimates the impact of antidumping protection on export behavior of French firms covered by antidumping cases. Traditional models suggest that all domestic firms covered by antidumping protection should benefit from protection. However, in an environment of globally fragmented supply chains, firms may be damaged by protection if duties increase input costs for firms covered by the protection. Results from this paper indicate that while non-exporting firms benefit from protection, domestic sales of export-oriented firms and exports in general, are depressed due to protection. This effect is more severe for multinational firms

The effects of foreign competition on U.K. wages and employment: evidence from panel data

The Effect of Foreign Competition on UK Employment and Wages: Evidence from Firm-Level Panel Data. —This paper contributes to the sparse empirical literature on the effects of foreign competition on domestic employment and wages. The authors estimate a structural labour demand equation on UK firm-level panel data between 1982 and 1989 and several wage equations. When they restrict the sample to the manufacturing sector only, they find for the unionized firms that foreign competition has a negative effect on both wages and on employment. However, when UK manufacturing firms face only a few rivals, foreign competition has a positive effect on wages, but no effect on employment.Die Auswirkung ausländischer Konkurrenz auf Beschäftigung und Löhne im Vereinigten Königreich. Evidenz aus Daten von Unternehmensbefragungen. —Die Verfasser leisten einen Beitrag zu der spärlichen empirischen Literatur über die Wirkungen ausländischer Konkurrenz auf Beschäftigung und Löhne im Inland. Sie schätzen eine strukturelle Arbeitsnachfragegleichung auf der Basis von Daten aus Unternehmensbefragungen für das Vereinigte Königreich zwischen 1982 und 1989 sowie mehrere Lohngleichungen. Wenn sie die Stichprobe nur auf die Verarbeitende Industrie beschränken, finden sie für gewerkschaftlich organisierte Unternehmen heraus, daβ die ausländische Konkurrenz sowohl auf die Löhne als auch auf die Beschäftigung negative Auswirkungen hat. Soweit die britischen gewerblichen Unternehmen dieses Sektors allerdings nur wenigen Konkurrenten gegenüberstehen, hat die ausländische Konkurrenz eine positive Wirkung auf die Löhne, dagegen keine auf die Beschäftigung