Under the Cover of Antidumping: Does Administered Protection Facilitate Domestic Collusion?
- 260 Downloads
Anecdotal evidence suggests that domestic firms can use the antidumping petition process to engage in collusion and increase domestic prices. In this paper, I test whether the antidumping petition process itself can help domestic firms raise prices. I propose a method to identify whether firms in the industry experience a structural break in the level of market power possessed by the firms at the time that they file their antidumping petition. I use this methodology to analyze the impact of antidumping petitions on competition levels in two industries. I find little evidence that either of these industries increased their market power following the filing of petitions for trade relief, nor even from the protection that resulted from these petitions. These findings suggest that the widespread belief that antidumping leads to more market power may not always hold.
- Hartigan, J. C. (1995). Collusive aspects of cost revelation through antidumping complaints. Journal of Institutional and Theoretical Economics, 151(3), 478–489.Google Scholar
- Klein, C. (2011). Deregulation and the demise of sham litigation: A structural time series test. Paper presented at the 9th annual meeting of the international industrial organization conference, Boston.Google Scholar
- Olson, K. M. (2004). Free riders among the rent seekers: A model of firm participation in antidumping petitions. Retrieved April 22, 2013, from American University Web site: http://aladinrc.wrlc.org/bitstream/handle/1961/4941/200404-01.pdf
- Pierce, R. J. (1999). Antidumping law as a means of facilitating cartelization. Antitrust Law Journal, 67, 725–743.Google Scholar
- Staiger, R. W., & Wolak, F. A. (1994). Measuring industry specific protection: Antidumping in the United States. In M. N. Bailey & P. C. Winston (Eds.), Brookings papers on economic activity: Microeconomics (pp. 51–118). Washington, DC: The Brookings Institution.Google Scholar
- Tyson, L. D. (1992). Managing trade and competition in the semiconductor industry. In Who’s bashing whom? Trade conflict in high-technology industries (pp. 85–154). Washington, DC: Institute for International Economics.Google Scholar