Heterogeneous responses of firms to trade protection

Jozef Konings, Hylke Vandenbussche

Research output: Contribution to journalArticle

44 Citations (Scopus)

Abstract

This paper estimates the effect of antidumping protection on the productivity of domestic import-competing firms. Two key results emerge. First, the productivity of the average firm receiving protection moderately improves, but this is never sufficient to close the productivity gap with firms never involved in antidumping cases. Second, allowing for firm heterogeneity reveals that domestic firms with relatively low initial productivity - laggard firms - have productivity gains during protection, while firms with high initial productivity - frontier firms - experience productivity losses during protection. These results are consistent with recent theories showing that trade policy affects firms differently depending on their initial productivity.

Original languageEnglish
Pages (from-to)371-383
Number of pages13
JournalJournal of International Economics
Volume76
Issue number2
DOIs
Publication statusPublished - Dec 1 2008

Keywords

  • Antidumping protection
  • C2
  • F13
  • Firm heterogeneity
  • L 41
  • O30
  • Total factor productivity

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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