The Erosion of Tariff Preferences: The Impact of U.S. Tariff Reductions on Developing Countries

The Generalized System of Preferences (GSP), the program instituted in 1976 that allows developing countries to export thousands of products to the United States duty-free, is an important element of U.S. efforts to promote economic growth in the developing world. However, since the program's inception U.S. tariff rates have fallen significantly, thus potentially reducing the ability of the GSP program to encourage U.S. imports from beneficiary countries. This paper estimates the impact of U.S. tariff reductions on imports from the developing world using a panel of import data from 76 countries and 2,389 GSP-eligible products between 1998 and 2001. It finds that reductions in U.S. tariff rates have diminished imports from developing countries significantly, although some countries have been impacted more than others.Generalized System of Preferences, GSP, Trade Diversion, Preferential Tariffs

Overcoming Free Riding: A Cross Country Analysis of Firm Participation in Antidumping Petitions

This research is one of the first attempts to investigate the proliferation of antidumping protection from the firm-level and, in particular, to study the reasons why the free-riding problem may be more or less severe in particular countries or industries. Using a panel of data on the number of firms filing antidumping petitions in 10 countries between 1995 and 2005, I study the determinants of the industry's ability to overcome the free-riding problem. I find clear evidence that more firms will participate in antidumping petitions the lower the cost of filing; these filing costs significantly decrease in such variables as the number of countries targeted at one time and the level of development of the country. There is little evidence, however, that firms perceive that the expected benefits of the petition will be higher if they choose to participate, thus alleviating the free-rider problem. A separate statistical evaluation of actual case outcomes suggests that this perception may be valid.antidumping, free riding

Anticipated versus Realized Benefits: Can Event Studies Be Used To Predict the Impact of New Regulations?

Economists often use event study methodology to evaluate the impact of new regulations on firms before there is enough data to empirically estimate the effects. This research investigates the degree to which event study methodology can provide useful information in this regard by studying how accurately markets predict the actual benefits associated with a new law. Utilizing a unique change in U.S. trade law, I compare the benefits predicted by event study methodology with the actual benefits accruing to individual firms. The results indicate that estimates from event study methodology are poor predictors of the true effect of new policies.event studies, Byrd Amendment, antidumping

The Determinants of State-Level Antitrust Enforcement

While there has been a considerable literature exploring determinants of antitrust enforcement in the United States, studies have been based either on aggregate federal enforcement data over time (exploring cyclical influences) or cross-industry studies, usually for a single year or aggregated over several years. What has never been investigated is the pattern of state-level antitrust. This is somewhat surprising, as this has been a major activity of many state Attorneys General. In this paper, we explain state antitrust enforcement across states and time (for a 15-year period), examining a number of economic and political determinants which have been proposed in the literature.antitrust enforcement

Innovation Through Protection: Does Safeguard Protection Increase Investment in R and D?

We perform the first empirical study to focus on the relationship between trade protection and investment in Research and Development. Our results support predictions from the theoretical literature that temporary tariffs stimulate research and development, although we find no evidence that this effect diminishes as the termination of protection approaches as predicted by some theoretical models. We also find little evidence that quotas reduce research and development as predicted by multiple theoretical works. Finally, our results indicate that temporary tariffs result in decreased capital investment, perhaps because firms use periods of temporary protection to shutdown unprofitable facilities. This reveals an important distinction in firm behavior with regard to investment in tangible versus intangible capital during periods of trade protection.Research and Development, Strategic Protection

Maintaining New Markets: Determinants of Antitrust Enforcement in Central and Eastern Europe

While others have examined the implementation and/or the stringency of enforcement of antitrust laws in post-socialist economies, this paper is the first study that attempts to explain the determinants of antitrust enforcement activity across post-socialist countries using economic and political variables. Using a panel of ten European post-socialist countries over periods ranging from 4 to 11 years, we find a number of significant determinants of enforcement in these countries. For example, larger economies engage in more antitrust enforcement, and countries have tended to increase their enforcement efforts over time. Our results also suggest that countries characterized by more unionization and less corruption tend to engage in greater antitrust enforcement of all types. Countries more successful in privatizing have filed fewer cases, while more affluent or developed countries investigate fewer cases of all types, consistent with an income-shifting motivation for antitrust.Antitrust Enforcement, Central and Eastern Europe, Competition Policy JEL classification: L4, P3

From Agreement to Application. A Cross Country Analysis of Injury Determinants under the WTO Antidumping Agreement

Although the World Trade Organization's (WTO) Antidumping Agreement includes rules that govern the application of antidumping duties, countries still have a great deal of latitude in how they decide whether to impose this form of protection. This research is one of the first papers to explore country and industry specific differences in the determinants of antidumping injury decisions. Using a randomcoefficients probit model, I estimate the amount of variance in the marginal impact of particular characteristics on the probability of an affirmative injury determination. I investigate to what extent this variance can be explained by specific characteristics of the investigating country. The results indicate that there is a great deal of inconsistency in injury decisions under the current WTO Antidumping Agreement.Antidumping, World Trade Organization, Random- Coefficients

Trade Policy and Antitrust: Do Consumers Matter to Legislators?

We provide one of the first efforts to measure the importance of consumer preferences in legislators’ trade policy decisions by estimating the degree to which the level of antitrust enforcement in the legislator’s state impacts his or her vote on free trade agreements. To the extent that antitrust and trade liberalization are both viewed as proconsumer in nature, we would expect to see a positive relationship between antitrust enforcement in their legislative district and Congressional votes in support of trade liberalization. We find evidence suggesting that consumer preferences do play a role in legislative decisions on trade policy.Free Trade Agreements, Competition Policy, Antitrust, Voting

The curious time lags of PG 1244+026: Discovery of the iron K reverberation lag

High-frequency iron K reverberation lags, where the red wing of the line responds before the line centroid, are a robust signature of relativistic reflection off the inner accretion disc. In this letter, we report the discovery of the Fe K lag in PG 1244+026 from ~120 ks of data (1 orbit of the XMM-Newton telescope). The amplitude of the lag with respect to the continuum is 1000 s at a frequency of ~1e-4 Hz. We also find a possible frequency-dependence of the line: as we probe higher frequencies (i.e. shorter timescales from a smaller emitting region) the Fe K lag peaks at the red wing of the line, while at lower frequencies (from a larger emitting region) we see the dominant reflection lag from the rest frame line centroid. The mean energy spectrum shows a strong soft excess, though interestingly, there is no indication of a soft lag. Given that this source has radio emission and it has little reported correlated variability between the soft excess and the hard band, we explore one possible explanation in which the soft excess in this source is dominated by the steep power-law like emission from a jet, and that a corona (or base of the jet) irradiates the inner accretion disc, creating the blurred reflection features evident in the spectrum and the lag. General Relativistic ray-tracing models fit the Fe K lag well, with the best-fit giving a compact X-ray source at a height of 5 gravitational radii and a black hole mass of 1.3e7 Msun.Comment: 6 pages, 6 figures, resubmitted to MNRAS after moderate revisions. This paper focuses on the discovery of the Fe K reverberation lag in PG 1244+026. We point the interested reader to Alston, Done & Vaughan (See today: arXiv:submit/0851673), which focuses on the soft lags in this sourc