Antidumping protection and markups of domestic firms: Evidence from firm level data

Abstract

This paper tests whether anti-dumping (AD) protection affects the market power of importcompeting domestic firms.To this end, we use a rich panel data set of about 4,000 EU producers that were involved in AD-cases, to estimate markups before and after the filing of a case.Using the Roeger (1995) method, our findings indicate that AD-protection has positive and significant effects on domestic markups, except in cases where import diversion after protection is strong, like in 'seamless steel tubes'.AD-filings without ensuing protection did not result in increased markups, suggesting that it is the 'protection' decision rather than the 'filing' decision that is required for rising markups.Our results control for potential endogeneity of AD-filings.A randomly drawn control group of firms not subject to AD-policy, did not have rising markups over the same period.

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