Antidumping Protection and Productivity Growth of Domestic Firms Antidumping Protection and Productivity Growth of Domestic Firms

We analyze the effects of European Antidumping (AD) protection on Total Factor Productivity (TFP) growth of import-competing domestic firms. We identified a panel of 1,793 European firms between 1993 and 2000 affected by AD cases that were initiated in 1996. Using a difference-indifference approach, we find evidence of increased TFP growth for those firms that filed for protection compared to firms that did not. Our analysis also indicates that the effects of protection depend on the " distance to the frontier firm " in the industry. While protection raises TFP growth of " laggard " firms, this is less the case for firms close to the efficiency frontier. These results are in line with recent theoretical work relating firms' incentives to restructure in response to competition in the market. Loecker, Reinhilde Veugelers and Joze Damidjan. We are grateful to the Fund for Scientific Research (FWO) grant n° G.0122.98 for financial support.