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Did US Safeguards Affect Mark-ups of EU Steel Producers?

Author

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  • Vandenbussche, Hylke
  • Zarnic, Ziga

Abstract

This paper empirically investigates the effects of the US safeguard protection on steel imports in 2002 on the mark-ups of EU steel producers. We identify a large panel of EU steel producers between 1995 and 2005 affected by the safeguards. Using the Roeger methodology, our results show that the protection signifcantly reduced the EU firms' mark-ups. Single-product firms suffered relatively more from the safeguards than multi-product firms. Our evidence further suggests that the US protection resulted in some diverting of the EU steel especially towards China, aggravating the situation on the Chinese steel market and ultimately resulting in the Chinese trade protection of steel imports.

Suggested Citation

  • Vandenbussche, Hylke & Zarnic, Ziga, 2007. "Did US Safeguards Affect Mark-ups of EU Steel Producers?," CEPR Discussion Papers 6486, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:6486
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    More about this item

    Keywords

    Firm data; Price-cost margins; Safeguard measures; Steel industry; Trade diversion;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics

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