Asset Specificity, Corporate Protection and Trade Policy: Firm-level Evidence from Antidumping Petitions in Nineteen Jurisdictions

Benjamin Egerod, Mogens Kamp Justesen*

*Corresponding author for this work

Research output: Contribution to journalEditorialpeer-review

Abstract

This letter provides firm-level evidence that policy makers tailor trade policy to suit selected firms. It argues that firms with higher levels of specific assets find it more costly to reorganize production, and are hurt more by international competition. In response, policy makers grant more trade protection to firms with fixed assets. Since protectionism is costly, firms compete for it, which creates diffusion dynamics in which the protection granted to one firm affects the protection granted to others. This claim is tested utilizing the special role antidumping duties (ADDs) play in international trade, and combining petitions for ADDs with financial data on the firms filing them in a unique dataset. Using spatial autoregressive models, the authors find that firms with specific assets are granted more protection. However, diffusion dynamics differ within and between groups of firms producing the same good. This suggests that firms can partly shape their own level of trade protection.
Original languageEnglish
JournalBritish Journal of Political Science
Number of pages10
ISSN0007-1234
DOIs
Publication statusPublished - 5 Apr 2021

Bibliographical note

Epub ahead of print. Published online: 05 April 2021

Keywords

  • Trade policy
  • Inequalities in the cost of free trade
  • Protectionism
  • Firm level
  • Political influence
  • Diffusion of trade protection

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