This is the first empirical study to examine Congressional support of a new law that distributes antidumping duties to protected firms. Because the law produces a transparent measure of how much each firm was rewarded for its efforts to secure the bill's passage, it provides researchers with a unique opportunity to study the link between the expected financial returns to firms, campaign contributions, and Congressional behaviour. Our results indicate that campaign contributions from beneficiaries increased the likelihood that lawmakers would sponsor the law, while contributions from the law's beneficiaries increased with the rewards they expected to receive. JEL classification: F13, D72Les rendements de la chasse aux rentes : contributions aux campagnesélectorales, subventions aux entreprises, et l'Amendement Byrd. Ceci est la premièreétude empirique examinant le support par le Congrès américain d'une nouvelle loi qui distribue les droits anti-dumping collectés aux entreprises protégées. Parce que la loi produit une mesure transparente de la récompense verséeà une entreprise pour ses efforts de lobbying afin de s'assurer que la loi est mise en vigueur, cela permet aux chercheurs d'étudier le lien entre les rendements financiers anticipés pour les entreprises, leurs contributions aux campagnesélectorales, et les actions du Congrès. Les résultats indiquent que les contributions aux campagneś electorales en provenance des bénéficiaires potentiels accroissent la probabilité que les législateurs vont supporter la loi, et que les contributions en provenance des bénéficiaires de la loi s'accroissentà proportion que la taille de la récompense anticipée s'accroît.

Trade protection policies, steel,

Antidumping, commercial policy, protection, trade,

The steel industry has been protected by a wide variety of trade policies, both tariff-and quotabased, over the past decades. This extensive heterogeneity in trade protection provides the opportunity to examine the well-established theoretical literature predicting nonequivalent effects of tariffs and quotas on domestic firms' market power. Robust to a variety of empirical specifications with U.S. Census data on the population of U.S. steel plants from 1967-2002, we find evidence for significant market power effects for binding quota-based protection, but not for tariff-based protection. There is only weak evidence that antidumping protection increases market power. JEL Codes: F13, F23, L11

No abstract

The steel industry has been protected by a wide variety of trade policies, both tariff-and quotabased, over the past decades. This extensive heterogeneity in trade protection provides the opportunity to examine the well-established theoretical literature predicting nonequivalent effects of tariffs and quotas on domestic firms' market power. Robust to a variety of empirical specifications with U.S. Census data on the population of U.S. steel plants from 1967-2002, we find evidence for significant market power effects for binding quota-based protection, but not for tariff-based protection. There is only weak evidence that antidumping protection increases market power.

This is the first empirical article to analyze the response of shareholders to the threat of retaliatory tariffs authorized by the World Trade Organization (WTO). We use event study methodology to gauge the impact of European Union (EU) retaliatory threats stemming from the 2002 imposition of U.S. steel safeguards. Results indicate that the U.S. stock returns of firms slated for WTO-authorized tariffs reacted negatively to the announcements, signaling an increased likelihood of retaliation. Shareholders also generally responded positively to the early cancellation of the safeguards, which removed the risk of retaliation. Industry-level analysis indicates that producers of apparel, tobacco, and transportation equipment were particularly affected by the threat of retaliatory tariffs. Second-stage estimates suggest that retaliatory threats have a more negative impact on firms with a higher export share to the EU, greater profit growth, and low research-and-development intensity. (c) 2008 by The University of Chicago. All rights reserved..

Abstract.  This paper analyses the steel safeguards applied during 2001–3. Results reveal that for shareholders of U.S. steel companies safeguards generated positive ‘abnormal’ returns of approximately 6%. The cancellation of the safeguards resulted in wealth gains of about 5%. Steel shareholders experienced negative abnormal returns of −5% in response to the WTO ruling that the U.S. had violated WTO law. Our results are consistent with the neoclassical view that producers gain at the expense of consumers. Also, findings indicate that downstream‐consuming firms that diversify production in NAFTA countries avert some trade policy risk associated with higher steel costs caused by safeguard protection.