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Endogenous trade restrictions and exporters' pricing behavior

Author

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  • Laura Rovegno

    (CREA, Université du Luxembourg)

Abstract

This paper analyses the effect of antidumping (AD) duties on the pricing behaviour of exporters targeted with these measures. Using product and firm-level data for South Korea, the study provides evidence of increased export unit values and firms’ markups following the imposition of AD ad valorem duties. These findings are consistent with the hypothesis that, unlike other import tariffs, AD duties are not absorbed by exporters. The results on firms’ average markups also suggest that the price adjustment following the imposition of AD duties occurs mostly through the export price, and not through reductions in the exporter’s home price. The analysis controls for the presence of other trade measures as well as the endogeneity in AD and other contingent protection measures.

Suggested Citation

  • Laura Rovegno, 2013. "Endogenous trade restrictions and exporters' pricing behavior," DEM Discussion Paper Series 13-25, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:13-25
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    File URL: http://wwwfr.uni.lu/content/download/66355/840442/file/2013-25%20-%20Endogenous%20trade%20restrictions%20and%20exporters'%20pricing%20behavior.pdf
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    Citations

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    Cited by:

    1. Zanardi, Maurizio & Nita, Andreea, 2013. "The First Review of EU Antidumping Reviews," CEPR Discussion Papers 9343, C.E.P.R. Discussion Papers.
    2. Stefan KÜHN & Christian VIEGELAHN, 2019. "Foreign trade barriers and jobs in global supply chains," International Labour Review, International Labour Organization, vol. 158(1), pages 137-167, March.
    3. Andreea C. Nita & Maurizio Zanardi, 2013. "The First Review of European Union Antidumping Reviews," The World Economy, Wiley Blackwell, vol. 36(12), pages 1455-1477, December.

    More about this item

    Keywords

    endegenous trade policy; import tariffs; ad valorem duties; antidumping; markup; unit values; contigent protection;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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