NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Tariff-jumping FDI and Domestic Firms' Profits

Bruce A. Blonigen, KaSaundra Tomlin, Wesley W. Wilson

NBER Working Paper No. 9027
Issued in June 2002
NBER Program(s):   ITI

Studies of the welfare implications of trade policy often do not take account of the potential for tariff-jumping FDI to mitigate positive gains to domestic producers. We use event study methodology to examine the market effects for U.S. domestic firms that petitioned for antidumping (AD) relief, as well as the effect of announcements of FDI by their foreign rivals in the U.S. market on these U.S. petitioning firms. On average, affirmative U.S. AD decisions are associated with 3% abnormal gains to a petitioning firm when there is no tariff-jumping FDI, but no abnormal gains if there is tariff-jumping FDI. The evidence for this mitigating effect is strongest when announcements of the intended tariff-jumping FDI have already occurred before an AD decision takes place, which happened in a fair number of cases. We also find evidence that the announcements of plant expansions (and, to some extent, new plants) have significantly larger negative effects on U.S. domestic firms' profits than other types of FDI, including acquisitions and joint ventures.

download in pdf format
   (226 K)

email paper

This paper is available as PDF (226 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Published: Blonigen, Bruce A., KaSaundra Tomlin, and Wesley W. Wilson. “Tariff-jumping FDI and Domestic Firms’ Profits.” Canadian Journal of Economics 37 (August 2004): 656-77.

Users who downloaded this paper also downloaded these:
Blonigen w7776 Tariff-Jumping Antidumping Duties
Blonigen and Prusa w8398 Antidumping
Blonigen w11299 A Review of the Empirical Literature on FDI Determinants
Helpman, Melitz, and Yeaple w9439 Export versus FDI
Blonigen w10783 Working the System: Firm Learning and the Antidumping Process
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us