Working Paper: NBER ID: w16391
Authors: Bruce Blonigen; Benjamin H. Liebman; Justin R. Pierce; Wesley W. Wilson
Abstract: Over the past decades, the steel industry has been protected by a wide variety of trade policies, both tariff- and quota-based. We exploit this extensive heterogeneity in trade protection to examine the well-established theoretical literature predicting nonequivalent effects of tariffs and quotas on domestic firms' market power. Robust to a variety of empirical specifications with U.S. Census data on the population of U.S. steel plants from 1967-2002, we find evidence for significant market power effects for binding quota-based protection, but not for tariff-based protection. There is only weak evidence that antidumping protection increases market power.
Keywords: Trade Protection; Market Power; Tariffs; Quotas; Steel Industry
JEL Codes: F13; F23; L11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| binding quota-based protection (D45) | market power (L11) |
| tariff-based protection (F13) | market power (L11) |
| antidumping duties (F18) | market power (L11) |