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

The Heterogeneous Effects of Trade Protection: A Study of US Antidumping Duties on Portland Cement For many traded products, high transportation and trade costs can lead to regionally segmented markets, which affect both the pattern of trade and the impact of trade policy. This paper studies the imposition of antidumping duties in the cement industry and finds striking regional variation in their impact on domestic prices, sales and imports. Duties that were imposed on Japanese producers that were shipping cement to the US West-Coast coastal markets led to imperfect substitution to other imports, which allowed domestic prices and production to increase. Imperfect substitution also occurred following duties that were imposed on Mexican producers that were shipping cement to the US Gulf of Mexico coastal markets. But in the US Southwest border markets, the same duties had no impact on the domestic prices of cement. I link the variation in responses across regions to hysteresis that was due to high exit costs. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

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

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Publisher
Springer US
Copyright
Copyright © 2013 by Springer Science+Business Media New York
Subject
Economics / Management Science; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-013-9383-y
Publisher site
See Article on Publisher Site

Abstract

For many traded products, high transportation and trade costs can lead to regionally segmented markets, which affect both the pattern of trade and the impact of trade policy. This paper studies the imposition of antidumping duties in the cement industry and finds striking regional variation in their impact on domestic prices, sales and imports. Duties that were imposed on Japanese producers that were shipping cement to the US West-Coast coastal markets led to imperfect substitution to other imports, which allowed domestic prices and production to increase. Imperfect substitution also occurred following duties that were imposed on Mexican producers that were shipping cement to the US Gulf of Mexico coastal markets. But in the US Southwest border markets, the same duties had no impact on the domestic prices of cement. I link the variation in responses across regions to hysteresis that was due to high exit costs.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Apr 14, 2013

References

  • Dynamic pricing in the presence of antidumping policy: Theory and evidence
    Blonigen, BA; Park, J

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