Steel Safeguards and the Welfare of U.S. Steel Firms and Downstream Consumers of Steel: A Shareholder Wealth Perspective

Benjamin Liebman and Kasaundra M. Tomlin

The Institute for International Integration Studies Discussion Paper Series from IIIS

Abstract: This paper analyzes the steel safeguards implemented and subsequently removed during 2001-2003. Our results reveal that for shareholders of U.S. steel companies, safeguards generated positive “abnormal” returns of approximately 6%; and the cancellation of the safeguards resulted in wealth gains of about 5%. Steel shareholders experienced negative abnormal returns of -5% in response to the WTO ruling that the U.S. violated WTO law. The results here are consistent with the neoclassical view that producers gain at the expense of consumers. Downstream consumers in transportation equipment and electrical equipment showed the clearest negative reaction to the safeguards. Moreover, steel firms that received larger cash disbursements under the Byrd amendment received additional wealth gains when the safeguard duties were imposed. Finally, empirical results indicate that U.S. downstreamconsuming firms that diversify production in NAFTA countries avert some trade policy risk associated with the initiation of the safeguard investigation and the imposition of the safeguard duties.

Keywords: Antidumping Policy; Welfare (search for similar items in EconPapers)
Date: 2006-05-25
New Economics Papers: this item is included in nep-int and nep-reg
Note: Length:
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.tcd.ie/triss/assets/PDFs/iiis/iiisdp144.pdf (application/pdf)

Related works:
Journal Article: Steel safeguards and the welfare of U.S. steel firms and downstream consumers of steel: a shareholder wealth perspective (2007)
Journal Article: Steel safeguards and the welfare of U.S. steel firms and downstream consumers of steel: a shareholder wealth perspective (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iis:dispap:iiisdp144

Access Statistics for this paper

More papers in The Institute for International Integration Studies Discussion Paper Series from IIIS 01. Contact information at EDIRC.
Bibliographic data for series maintained by Maeve ().