Tariff‐jumping FDI and domestic firms' profits |
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| Authors: | Bruce A Blonigen KaSaundra Tomlin Wesley W Wilson |
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| Institution: | Department of Economics, University of Oregon; Department of Economics, Oakland University; Department of Economics, University of Oregon |
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| Abstract: | Abstract. Studies of trade policy welfare effects often ignore the potential for tariff‐jumping foreign direct investment (FDI) to mitigate positive gains to domestic producers. Using event study methodology we find that affirmative U.S. antidumping decisions are associated with average abnormal gains of over 3% to a firm in the petitioning industry in the absence of tariff‐jumping FDI, but much smaller and statistically insignificant abnormal gains if there is tariff‐jumping FDI. We also find evidence that tariff jumping in the form of new plants or plant expansion has significantly larger negative effects on U.S. domestic firms' profits than other types of tariff‐jumping FDI. JEL Classification: F13, F23, L11 |
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