Why don’t foreign firms cooperate in US antidumping investigations? An empirical analysis

Foreign firms face punitive duties if they do not cooperate with the US Department of Commerce (DOC) in antidumping procedures. For example, 37% of all foreign firms involved in antidumping investigations in the US faced “facts available” margins for the 1995–2002 period, with average antidumping duties of 31% for cooperating foreign firms, compared to 87% for those who did not cooperate. The existing literature has focused on how DOC discretion has led to foreign firm non-cooperation. This paper instead examines individual foreign firm’s decisions about whether to cooperate during this same period. We find evidence that non-cooperation is consistent with a model of foreign firms rationally choosing not to cooperate, rather than solely as a result of investigating authority bias against imports.     

U.S. Antidumping Enforcement and Macroeconomic Indicators Revisited: Do Petitioners Learn?

We contribute to the literature on the political economy of U.S. antidumping enforcement through an analysis of the pattern—and macroeconomic determinants—of country-specific antidumping petitions filed by U.S. firms against 15 countries between 1981 and 1998 (examining quarterly data). We reconcile some seemingly inconsistent results from the prior literature by suggesting that “learning” by petitioners about the administration—in practice—of the U.S. trade laws has led to changes in the roles of the macroeconomic determinants over time. JEL no. F13     

FDI and wage spillovers in Indonesian manufacturing

This paper examines the effect of foreign direct investment in Indonesian manufacturing on wages in locally owned Indonesian manufacturing plants. The issue is examined in a cross section of Indonesian manufacturing industries and provinces in one of the few years for which data on worker characteristics were available. Wages in locally owned plants were high in industries and industries within provinces with large foreign presence. Since the foreign plants also pay higher wages than locally owned ones, the two factors together imply that higher foreign presence raises the general wage level in a province and industry. JEL no. F2, J3 This paper was prepared as part of an ICSEAD project on “Foreign Multinational Corporations and Host-Country Labor Markets in Asia”. Earlier versions appeared as ICSEAD Working Paper 2001–02 and NBER Working Paper No. 8299.     

Learning-by-Exporting: Continuous Productivity Improvements or Capacity Utilization Effects? Evidence from Slovenian Firms

Following along the lines of a growing literature on the causal link between exporting and productivity, this paper analyzes the existence of “learning-by-exporting” using firm-level data for Slovenian manufacturing enterprises between 1994 and 2002. We fail to find conclusive evidence of learning-by-exporting. By matching new exporting firms to “sufficiently” similar non-exporters and using the difference-in-differences method on the matched pairs it is revealed that productivity improvements, although present, are far from permanent and tend to dissipate shortly after initial entry. Confronting the data on factor accumulation with TFP measures indicates that the perceived learning effects may in fact only be a consequence of increased capacity utilization brought about by the opening of an additional market. JEL no. D24, F12, F14     

Exploring the Intensive and Extensive Margins of World Trade

World trade evolves at two margins. Where a bilateral trading relationship already exists it may increase through time (intensive margin). But trade may also increase if a trading bilateral relationship is newly established between countries that have not traded with each other in the past (extensive margin). We provide an empirical dissection of post–World War II growth in manufacturing world trade along these two margins. We propose a “corner-solutions version” of the gravity model to explain movements on both margins. A Tobit estimation of this model resolves the so-called “distance puzzle”. It also finds more convincing evidence than recent literature that WTO-membership enhances trade. JEL no. F12, F15     

The ec antidumping regulations: A first economic appraisal, 1980–85

Zusammenfassung Die Antidumpingregeln der EG: Eine erste Bewertung für die Jahre {dy1980} bis 1985. - Der Aufsatz enth?lt systematische Belege dafür, da\ die gegenw?rtigen GATT-konformen Antidumpinggesetze wie z. B. die entsprechenden EG-Bestimmungen einen stark protektionistischen Inhalt haben. Die Antidumpingma\nahmen, die einem durchschnittlichen Wertzoll von ungef?hr 23 vH entsprechen, vermindern die Importmengen um 40 vH. Die dadurch hervorgerufenen Renten erscheinen Firmen in Industriel?ndern als hoch, Firmen in Entwicklungs- und Schwellenl?ndern aber als niedrig. Einige Absprachen zwischen EG-Unternehmen scheinen „effizient” zu sein, wenn es darum geht, Protektion zu erlangen oder Marktstrukturen zu gestalten. Als Ergebnis ist festzuhalten, da\ L?nder, die eine Protektionspolitik verfolgen, anstelle von „freiwilligen Exportbeschr?nkungen” Antidumpingma\nahmen vorziehen sollten.

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Resumen El reglamento antidumping de las CC.EE.: una primera evaluación económica del período 1980–85. - Este trabajo provee evidencia sistemática que demuestra que los reglamentos antidumping actuates consistentes con el GATT, como el de las CC.EE., tienen un fuerte contenido proteccionista. Las medidas antidumping que representan un arancel ad valorem medio equivalente a aproximadamente un 23 por ciento redujeron las cantidades importadas en un 40 por ciento. Las rentas creadas parecen ser substanciales para empresas de los países industrializados, mas modestas para empresas de países en desarrollo o de los NICs. Algunas coaliciones de empresas de las CC.EE. parecen ser “eficientes” en cuanto a la obtención de protection y de influencia sobre las estructuras de los mercados. Como consecuencia, los países en búsqueda de protección prodrían preferir medidas antidumping en vez de “contingentes voluntarios de exportation”.

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Résumé Les règlements antidumping de la CE: Une première évaluation économique, 1980-85. - Cette étude fournit l’évidence systématique que les antidumping lois actuelles qui sont conformes aux règles de GATT telles que les règlements de la CE ont un contenu très protectioniste. Les mesures antidumping qui représentent un ad valorem équivalent de 23 pour cent en moyenne réduisent les importations (en volume) par 40 pour cent. Les profits créés sont hauts pour les entreprises aux pays industrialisés, mais modérés pour les entreprises aux PVD et aux NPI. Quelques coalitions des entreprises de la CE semblent être efficientes si elles veulent obtenir une protection et former la structure d’un marché. Le résultat est que les pays en faveur du protectionisme devraient préférer des actions antidumping aux restrictions volontaires à l’exportation.

     

“Following” or “attracting” the customer? Japanese Banking FDI in Europe

Using firm-level Japanese FDI data on investment into 18 European countries between 1970–2000 in all industries (banking, manufacturing, wholesale/retail distribution, and business services), this study examines if the “follow the customer” (FTC) hypothesis holds for firm-level data. The results suggest that banks do follow their customers into a foreign market, as part of a larger strategy that goes beyond the FTC theory. The firm level data show that the majority of FDI into a host country occurs after the foreign bank has established operations. Policy implications of this finding include the suggestion that host economies liberalize their financial sector early in an effort to attract banking FDI which then will attract non-banking FDI rather than the reverse.     

The welfare effects of U.S. antidumping duties

Antidumping duties are among the most frequently used nontariff barriers to trade. Despite this, empirical analysis of the welfare effects of antidumping duties has been very limited. This paper helps close this gap by computing the welfare effects of 30 U.S. antidumping duties. These effects are computed using a Dixit-Stiglitz type model of preferences in conjunction with data from the International Trade Commission. The paper finds that the import relief provided by antidumping duties is small in comparison to the losses imposed on U.S. consumers.     

Big philanthropy and the funding of black organizations

Conclusion The general overview of foundation giving to promote black interests and the specific look at the Ford-MARC relationship support the notion that few foundation grants will go to “controversial” or “political” projects. The Peterson Commission estimated that only three percent of all private foundation grants are “innovative” and an even smaller percentage are “politically controversial.” Most often, these projects usually become controversial after the grant is made. A 1971 Urban League study revealed that grants for human services made by private foundations to black and Spanish-speaking communities were disproportionately low when measured in terms of the per capita needs of the minority population. Nevertheless, it is unrealistic to expect Ford, Rockefeller Brothers, Mott, or Carnegie to redistribute income or become the “cutting edge of social change”.     

Foreign direct investment, agglomerations, and demonstration effects: An empirical investigation

Previous studies have shown that the localisation of firms can be an important factor in attracting new foreign direct investment into a host country. The authors distinguish between “efficiency agglomerations” which arise as firms increase their efficiency by locating close to each other, and “demonstration effects” whereby existing firms send signals to new investors as to the reliability and attractiveness of the host country. They try to disentangle these two effects by examining the location of US firms in Ireland. They find that both sources of agglomerations have been important determinants of US firm entry into Ireland. JEL no. F23     

The Link Between CEO Compensation and Firm Performance: Does Simultaneity Matter?

In order to combat the principle-agent problem, directors of public companies use incentive-based contracts to align the interests of CEOs and shareholders. Some studies suggest that these contracts are an inefficient use of resources, and that they do not motivate CEOs to do what is best for the firm. In this study, the author estimates a regression to find the relationship between CEO Compensation and market value of a firm. In order to address persistence, endogeneity and firm-specific effects the author uses the first-differenced and system GMM regression techniques first used by [Arellano, M.; Bover, O. “Another Look at the Instrumental-Variable Estimation of Error-Component Models,” Journal of Econometrics, 68, 1995, pp. 29–51] and [Blundell, R. W.; Bonds, S. R. “Initial Conditions and Moment Restrictions in Dynamic Panel Data Models,” Journal of Econometrics, 87, 1998, pp. 115–43; Blundell, R. W.; Bond, S. R., Windmeijer, F. “Estimation in Dynamic Panel Data Models: Improving on the Performance of the Standard GMM Estimators,” Institute for Fiscal Studies Working Paper W00/12, London, England, 2000]. These regressions report a positive relationship between CEO compensation and market value of a firm. This study concludes that incentive based contracts are effective, due to the positive pay-to-performance link, when controlling for simultaneity. First place winner of the Undergraduate Best Paper Award Competition at the 60th International Atlantic Economic Conference in New York, NY, October 6–9, 2005.     

Dutch disease revisited. Oil discoveries and movements of the real exchange rate when manufacturing is resource-intensive

We study how natural resource booms affect the real exchange rate in a situation where there are input–output linkages between the manufacturing sector and the natural resource sector. An increase in revenues from natural resources could de-industrialize an economy by raising the real exchange rate, rendering the manufacturing sector less competitive. This tendency towards de-industrialization has been called “Dutch disease”. We build a theoretical model showing that a country experiencing discoveries of natural resources, such as oil, is not necessarily bound to experience the Dutch disease. The appreciation of the real exchange rate can be escaped if patterns of specialization shift towards the manufacturing industries that use oil more intensively. In the second part of the paper, we test the model and find support for the claim that Dutch disease effect associated with discoveries of natural resources (namely oil) are dampened in countries that specialize in resource-intensive manufacturing industries.     

Are Antidumping Duties for Sale? Case‐Level Evidence on the Grossman‐Helpman Protection for Sale Model

Do contributions to politicians affect trade policy? To examine this question, we have compiled a new, unique database containing information on political donations by the specific firms and labor organizations that have petitioned for antidumping protection from imports, as well as data on the outcomes of their requests. Using an empirical framework based on the 1994 “protection for sale” model, we examine the relationship between antidumping decisions and political activism. Our results indicate that money does matter. We find that politically active petitioners are more likely to receive protection and that antidumping duty rates tend to be higher for that group. In addition, the relationship between the import penetration ratio and duties imposed depends on whether or not petitioners are politically active—antidumping duties are positively correlated with the import penetration ratio for politically inactive petitioners but negatively correlated for politically active petitioners, consistent with the Grossman‐Helpman model's predictions.     

Cognitive skills, test scores, and social stratification: The role of family and school-level resources on racial/ethnic differences in scores on standardized tests (AFQT)

Conclusion  In this paper I ahve shown that scores on the AFQT are a function of family and school level material resources and investments on individual development. The AFQT is not a measure of “intelligence (IQ),” “ability,” or “cognitive skills.” The AFQT is in large part a measure of access to material resources, social investments, and exposure to the values, experiences, and networks of the white upper middle class.     

Foreign direct investment and productivity spillovers: Evidence from the Spanish experience

Foreign Direct Investment and Productivity Spillovers: Evidence from the Spanish Experience. — The aim of this paper is to analyse the impact of foreign direct investment (FDI) on firms’ productivity using a panel of Spanish manufacturing firms for the period 1990–1998. Firstly, we show that for countries, like Spain, that are undergoing significant structural changes over the period in question it is important to control for both time-invariant as well as time-variant sectoral characteristics. Secondly, we confirm previous findings that one needs to take into account the “absorptive capacity” of firms when considering whether they are able to avail of externalities associated with FDI presence. For the Spanish case we find that only firms with sufficient levels of such capacity experience positive spillovers.     

Project Assistance versus Budget Support: An Incentive-Theoretic Analysis of Aid Conditionality

Foreign aid is conveyed predominantly in the form of project assistance, rather than general budgetary support for the recipient government. Most theoretical explanations of this phenomenon center on the possibility of a divergence of preferences, or opinions, between donor and recipient. Projects or conditional transfers, rather than “cash”, may then be ways by which donors align the recipients’ incentives more closely with their own preferences. This paper proposes an alternative, complementary, explanation, based on information asymmetries between voters in donor nations, and their aid agency administrators. If voters are uncertain about the “type” of their administrator agent, who is better informed about the efficacy of alternative policies, then project assistance may be chosen, even when budget support provides a more efficient alternative. JEL no. F35, O19, D82     

Labour-market effects of intra-industry trade: Evidence for the United Kingdom

Labor-Market Effects of Intra-Industry Trade: Evidence for the United Kingdom. — According to the “smooth adjustment hypothesis”, the labor-market adjustment costs entailed by trade liberalization are lower if trade expansion is intra-industry rather than inter-industry in nature. In this paper, we study the link between trade and labor market changes in UK manufacturing industries during the 1980s. We use industry-level measures of unemployment duration and wage variability as proxies for adjustment costs, and we relate them to various measures of intra-industry trade. Our evidence offers some support for the smooth adjustment hypothesis.     

A new look at the impact of U.S. import barriers on corporate profit expectations

A New Look at the Impact of U.S. Import Barriers on Corporate Profit Expectations. — The notion that industries benefit from protection is firmly grounded in trade theory. However, previous “event studies” measuring the impact of trade restrictions on stock prices reveal that shareholders expect no improvement in industry profits from protection. The implication is that barriers designed to promote industry adjustment are considered ineffective by equity holders. This investigation of U.S. “Escape Clause” cases shows that shareholders do expect protection to enhance profits, but not universally. Outcomes are linked to the type of trade measure selected, with industries protected by tariffs or global quotas faring better than those shielded by nonglobal “Orderly Marketing Agreements.”     

Why Speed Doesn’t Kill: Learning to Believe in Disinflation

Central bankers generally prefer to reduce inflation gradually. We show that a central bank may try to convince the private sector of its commitment to price stability by choosing to reduce inflation quickly. We call this “teaching by doing”. We find that allowing for teaching by doing effects always speeds up the disinflation and leads to lower inflation persistence. So, we clarify why “speed” in the disinflation process does not necessarily “kill” in the sense of creating large output losses.     

日本反倾销政策及其特点探析

日本是世界上最早实施反倾销制度的国家之一，其反倾销政策具有自身的特点。同时，在美国和欧盟等发达国家或地区纷纷采用反倾销手段保护本国产业、国际反倾销摩擦愈演愈烈的大背景下，同为发达国家的日本却很少发起反倾销调查。本文从日本反倾销政策的基本内容出发，考察了日本反倾销政策及其实践的特点，并分析了形成这些特点的相关原因。