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Cascading contingent protection and vertical market structure |
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| Authors: | Leo Sleuwaegen,René Belderbos,Clive Jie-A-Joen |
| Affiliation: | aDepartment of Applied Economics, Catholic University of Leuven, Naamsestraat 69, B-3000 Leuven, Belgium, and Department of Economics, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands;bDepartment of Economics and Business Administration, Maastricht University, P.O. Box 616, 6200 MD Maastricht, The Netherlands;cArthur Andersen & Co, P.O. Box 21937, 3001 AX Rotterdam, The Netherlands |
| Abstract: | Cascading contingent protection may occur when protection of an upstream industry transfers injury to the downstream industry and increases the likelihood that this industry asks and receives protection. This paper examines cascading protection within a sequential petitioning model where the upstream industry acts as leader. The analysis identifies market structure and the vertical linkage between the upstream and the downstream industry as important determinants of the occurrence of cascading protection. It is shown that the circumstances which make cascading protection more likely to occur also make it more likely that this protection has serious negative welfare consequences. |
| Keywords: | Antidumping Cascading contingent protection Market structure Strategic trade policy |
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