Heterogeneous Productivity Response to Abolishing Antidumping Protection:

Abstract This study empirically investigates the effects of abolishing anti-dumping (AD) protection on the productivity of manufacturers operating in import-competing sectors. A panel of French firms protected by AD protection is identified between 2000 and 2008. While for some firms AD protection was abolished at some point during this period, for others AD protection continued. Employing a Difference-in-Difference approach, the empirical analysis indicates that the abolition of AD protection is associated with an on average rise in total factor productivity (TFP) of 4,1% for firms that are cut off from AD protection, as compared to firms protected by a continued AD protection. However, it is found that firms respond heterogeneously to the abolition of AD protection depending on their relatively distance to the domestic productivity frontier and exporting status. The empirical results indicate that the abolition of AD protection has a greater positive effect on the productivity of less efficient and inward-orientated firms.