TY  - JOUR
AU  - Blonigen,Bruce A.
AU  - Tomlin,KaSaundra
AU  - Wilson,Wesley W.
TI  - Tariff-jumping FDI and Domestic Firms' Profits
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9027
PY  - 2002
Y2  - June 2002
UR  - http://www.nber.org/papers/w9027
L1  - http://www.nber.org/papers/w9027.pdf
N1  - Author contact info:
Bruce Blonigen
Department of Economics
1285 University of Oregon
Eugene, OR 97403-1285
Tel: 541/346-4680
Fax: 541/346-1243
E-Mail: bruceb@uoregon.edu
AB  - 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.
ER  -