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Review of Industrial Organization

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01-06-2013

Antidumping Duties and Plant-Level Restructuring

Author: Justin R. Pierce

Published in: Review of Industrial Organization | Issue 4/2013

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Abstract

This paper examines the effect of antidumping duties on the restructuring activities of protected plants. Using a dataset that contains the full population of U.S. manufacturers, I find that protected plants increase their capital intensities modestly relative to unprotected plants, but only when antidumping duties have been in place for a sufficient duration. I find little effect of antidumping duties on a proxy for the skilled labor intensity of protected plants.

previous article Under the Cover of Antidumping: Does Administered Protection Facilitate Domestic Collusion?

next article How Different Are Safeguards from Antidumping? Evidence from US Trade Policies Toward Steel

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See Konings and Vandenbussche (2008) and Pierce (2011).

See Pierce and Schott (2012) for more details.

See Bown (2012).

See, for example, Berman et al. (1994) and Bernard and Jensen (1997).

The table reports means and standard deviations for all continuous variables that are employed in this paper. The Census Bureau does not permit release of minimum and maximum data, as they represent survey responses of individual establishments. Review of minimum and maximum data by the author did not reveal any anomalous observations.

In the time period examined in this paper, five of the 148 antidumping investigations completed ended with suspension agreements as the only form of protection. Under this arrangement, foreign firms agree to stop dumping, in exchange for suspension of the antidumping investigation. Because data on the effective duty rate—considered later in the paper—are unavailable for these investigations, they have been excluded from this analysis.

These two sources of bias were first discussed in Konings and Vandenbussche (2008).

The regressors are also drawn in part from Blonigen and Park’s (2004) analysis of the determinants of success in antidumping petitions. The estimation is described in additional detail in Pierce (2011). Results from the logit specification are also reported in that paper.

This cutoff was also employed in Konings and Vandenbussche (2008) and Pierce (2011).

The level of the Dur variable, as well as its interactions with Treatment and Post, individually, are not in the specification as they cannot be separately identified from the other covariates and fixed effects.

Note that the reported standard errors are adjusted to control for clustering at the product level.

See, e.g., Dixit and Pindyck (1994).

See Becker and Gray (2009).

Becker, R., & Gray, W. (2009). NBER-CES manufacturing industry database. Available online at http://www.nber.org/data/nbprod2005.html.

Berman, E., Bound, J., & Griliches, Z. (1994). Changes in the demand for skilled labor within U.S. manufacturing: Evidence from the annual survey of manufactures. Quarterly Journal of Economics, 109(2), 367–397.CrossRef

Bernard, A., & Jensen, J. B. (1997). Exporters, skill upgrading and the wage gap. Journal of International Economics, 42(1–2), 3–31.CrossRef

Bernard, A., Jensen, J. B., & Schott, P. (2006). Survival of the best fit: Exposure to low-wage countries and the (uneven) growth of U.S. manufacturing. Journal of International Economics, 68(1), 219–237.CrossRef

Blonigen, B., & Park, J. (2004). Dynamic pricing in the presence of antidumping policy: Theory and evidence. American Economic Review, 94(1), 134–154.CrossRef

Bown, C. (2012). Global antidumping database. The World Bank. Available online at http://econ.worldbank.org/ttbd/gad/.

Crowley, M. (2006). Do antidumping duties and safeguard tariffs open or close technology gaps? Journal of International Economics, 68(2), 469–484.CrossRef

Dixit, A., & Pindyck, R. (1994). Investment under uncertainty. Princeton: Princeton University Press.

Konings, J., & Vandenbussche, H. (2008). Heterogeneous responses to trade protection. Journal of International Economics, 76(2), 371–383.CrossRef

Matsuyama, K. (1990). Perfect equilibria in a trade liberalization game. American Economic Review, 80(3), 480–492.

Miyagiwa, K., & Ohno, Y. (1995). Closing the technology gap under protection. American Economic Review, 85(4), 755–770.

Pierce, J. (2011). Plant-level responses to antidumping duties: Evidence from U.S. manufacturers. Journal of International Economics, 85(2), 222–233.CrossRef

Pierce, J., & Schott, P. (2012). A concordance between U.S. Harmonized system codes and SIC/NAICS product classes and industries. Journal of Economic and Social Measurement, 37(1–2), 53–68.

U.S. International Trade Commission. (2006). Import injury investigations: Case statistics: FY 1980–2005.

Title: Antidumping Duties and Plant-Level Restructuring
Author: Justin R. Pierce
Publication date: 01-06-2013
Publisher: Springer US
Published in: Review of Industrial Organization / Issue 4/2013
Print ISSN: 0889-938X
Electronic ISSN: 1573-7160
DOI: https://doi.org/10.1007/s11151-013-9386-8

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Other articles of this Issue 4/2013

Under the Cover of Antidumping: Does Administered Protection Facilitate Domestic Collusion?

Antidumping and Production-Line Exit: The Case of the US Steel Industry

How Different Are Safeguards from Antidumping? Evidence from US Trade Policies Toward Steel

The Heterogeneous Effects of Trade Protection: A Study of US Antidumping Duties on Portland Cement

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