Working Paper: CEPR ID: DP4620
Authors: Jozef Konings; Hylke Vandenbussche
Abstract: In this Paper we provide empirical evidence that Antidumping (AD) Protection can induce technological catching-up by domestic firms affected by the import protection. We identify a panel of 1,793 import-competing domestic firms between 1993 and 2000, directly affected by AD cases that were initiated in 1996. Using a difference-in-difference approach, we find evidence of increased Total Factor Productivity (TFP) growth for firms protected by AD measures compared to firms that did not receive protection. Our analysis indicates, however, that the effect of protection depends on the ?distance to the frontier firm? in the industry. While protection raises TFP growth of ?laggard? firms, the reverse holds for domestic firms that are close to the efficiency frontier. These results confirm recent theoretical work supporting the view that protection can induce technological catching-up.
Keywords: Antidumping Protection; Technological Catching-Up; Total Factor Productivity
JEL Codes: C20; F13; L41; O30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| AD protection (Y20) | TFP growth (O49) |
| AD protection (Y20) | technological catching up (O33) |
| TFP growth (laggard firms) (D25) | TFP growth (near efficiency frontier) (O49) |
| productivity growth (post-protection) (O49) | productivity growth (pre-protection) (O49) |
| AD protection (Y20) | firm-level restructuring efforts (L22) |