Heterogeneous responses of firms to trade protection
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Date
2008-02
Authors
Konings, Jozef
Vandenbussche, Hylke
Journal Title
Journal ISSN
Volume Title
Publisher
Centre for Economic Policy Research
Abstract
This paper uses EU firm-level panel data to estimate the effect of Antidumping
(AD) protection on the productivity of EU domestic firms in import-competing
industries. We find that firms with relatively low initial productivity - laggard
firms - have productivity gains during AD protection, while firms with high initial
productivity - frontier firms - experience productivity losses. While the
productivity of the average firm is moderately improved during AD protection,
productivity remains below that of firms never involved in AD cases, thus
questioning the desirability of protection. Our empirical results are consistent
with recent theoretical work supporting the view that trade policy can have a
differential effect on firms depending on their initial productivity.
Description
Keywords
antidumping protection, firm heterogeneity, total factor productivity, Research Subject Categories::SOCIAL SCIENCES::Business and economics
Citation
Konings Jozef, Vandenbussche Hylke, 2008, Centre for Economic Policy Research; Heterogeneous responses of firms to trade protection. http://nur.nu.edu.kz/handle/123456789/1889