Antidumping protection hurts exporters: firm-level evidence from France.

This paper empirically evaluates the effects of antidumping measures on the exports of protected firms. While antidumping protection raises the domestic sales of the more “traditional” non-exporting firms on the protected market with about 5%, it negatively affects the firm-level exports of similar products as the protected ones. Export sales of protected firms fall by almost 8% compared to a relevant control group of unprotected firms. The drop in firm-level exports more than doubles for firms that are global, i.e. firms with foreign affiliates. Measured at the product-level, extra-EU exports of goods protected by antidumping fall by 36% while exports to target countries fall by as much as 66% following protection. Protection also affects the extensive margin of exporters but to a lesser extent. Initial exporters face a marginally higher probability to stop exporting during protection compared to unprotected firms. Finally, we find that the productivity of exporters falls while that of non-exporters rises during antidumping protection. We offer a number of plausible explanations for our findings arising from the heterogeneous firm literature. We also discuss the importance of our findings for policy.

The taxation of multinationals: Firm level evidence for Belgium.

This paper provides empirical evidence of a more favorable tax treatment for foreign multinationals compared to similar domestic firms in a small open economy. Using treatment effects to control for self-selection of foreign firms into low tax firms, we find that foreign multinationals have substantially lower effective tax rates compared to domestic firms. In our estimations we also control for firm size, sector membership and business-cycle effects. A simple theoretical framework is used to explain our empirical findings and rests on the notion that multinational firms are in a better position to bargain for lower taxes with governments as a result of their 'footloose' nature and outside location options.Belgium; Corporate taxation; Domestic; Economy; Effective tax rates; Effects; Firm level data; Firm size; Firms; Framework; Multinational firms; Multinationals; Open; Options; Sector; Self-selection; Size; Tax rates;

Antidumping protection hurts exporters : firm-level evidence from France

antidumping, firm-level exports, intensive margin, extensive margin, productivity, dif-in-dif

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 at some point during this period are affected by AD initiations. Using a difference-in-difference approach, we find that AD measures result in improvements ofmeasured 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.total factor productivity, antidumping protection, technological catching-up

The global chilling effects of antidumping.

Advocates of antidumping (AD) laws downplay their effects by arguing that the trade flows that are subject to AD are small and their distortions negligible. This paper is the first to counter that notion by quantifying the worldwide effect of AD laws on aggregate trade flows. The recent proliferation of AD laws across countries provides us with a natural experiment to estimate the trade effects of adopting versus using AD laws; differences in the intensity of use among countries with older AD laws allow us to investigate reputation effects. For this purpose, we estimate worldwide trade flows using a gravity equation spanning 21 years (1980-2000) of annual observations. Our estimates confirm that AD effects are not small. Among other findings, new tough users have their aggregate imports depressed by 15.7 billion US$a year (or 6.7$ on top of the cumulative negative effect of reputation. For some countries, the dampening effects of AD laws on trade flows are found to nearly offset the gains from trade liberalization.Behavior; Control; Power; Law; Intensity; Trade liberalization;

Globalization and the effects of national versus international competition on the labour market. Theory and evidence from Belgian firm level data.

In this paper we first develop a simple theoretical framework which shows that important differences exist between national and international competition and their effect on national labour markets. National competition refers to a reduction of monopoly power in the product market through improved market contestability and market access, which is the responsibility of competition authorities. International competition refers to a reduction in product market competition as a result of trade liberalization. We show that when the domestic market is unionized, national entry (FDI or domestic entry) has very different effects on the national labour market than international entry (imports in the relevant product market). One result we obtain is that national competition need not increase domestic employment while trade competition need not lower domestic employment. Our analysis has at least two important implications. First, geographic location of competitors matters when institutional settings like trade unions are country specific. Second, a change in competition policy is likely to affect labour markets differently than a change in trade policy. The results also indicate that apart from location, market structure and the level at which wages are bargained over (firm or sector level) matter. In a further step the theoretical predictions we derive, are tested on Belgian company accounts data supplemented with data from a postal survey.

Does antidumping protection raise market power? Evidence from EU firm level data.

This paper empirically tests the effects of Anti-Dumping (AD) protection on the price-cost margin of firms. To this end, we use a rich panel data set of 1,666 EU producers that were involved in AD cases initiated in 1996. Our findings indicate that price-cost margins in most cases significantly increase in the period of protection compared to a period before protection. In industries where competition is very tough before protection, we fail to find an increase in price-cost margins, while in industries with positive markups before protection, trade policy raises market power between 3% points and 15 % points, depending on the sector. Our results are robust to alternative specifications and estimation techniques, controlling for unobservable fixed effects and potential endogeneity of the regressors. Our findings are also consistent with recent theoretical models that deal with the economic effects on price behaviour in response to AD protection.

A comparative analysis of EU Antidumping rules and application

Trade policy in the European Union is characterized by an intensive use of Antidumping measures. In this paper we compare existing practices in the EU to WTO rules and to other WTO Members. Our comparative analysis reveals that the EU's "lesser-duty rule", which limits the magnitude of the Antidumping duty to the level of domestic injury caused by dumped imports, results in a lower average duty level in EU cases, particularly when compared to the US. In terms of the "Sunset Clause", which limits the duration of protection to 5 years, the EU presents a lower share of measures lasting beyond this limit as compared to other users of Antidumping. In recent years, the number of case initiations by the EU has decreased. There has also been a shift towards the imposition of duties and away from the use of price undertakings as a protectionist measure. In line with other WTO members, an increasing share of cases are targeted against China, where it used to be predominantly Central-European countries and Japan, as well as other low or middle income countries.Antidumping, European Union, Contingent protection, Trade policy, lesser duty rule,price undertakings, WTO