Under the Cover of Antidumping: Does Administered Protection Facilitate Domestic Collusion?

Under the Cover of Antidumping: Does Administered Protection Facilitate Domestic Collusion? 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Under the Cover of Antidumping: Does Administered Protection Facilitate Domestic Collusion?

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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/s11151-013-9385-9
Publisher site
See Article on Publisher Site

Abstract

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.

Journal

Review of Industrial OrganizationSpringer Journals

Published: May 7, 2013

References

  • Estimating and testing linear models with multiple structural changes
    Bai, J; Perron, P
  • Conduct parameters and the measurement of market power
    Corts, KS

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