Production Networks and US Anti-Dumping Petitions

• In Event: Firm-Level Politics of Trade

Abstract

What attributes make firms more likely to receive privileged treatment from their government? Trade policy, as a redistributive tool, has long been used to understand such questions of special interest politics. Studying decisions on anti-dumping petitions in the US, we introduce a novel source of privileged treatment. We argue that the position of a firm within the economy is a key determinant of successful petitions: firms that have more links throughout the domestic economy, and specifically firms that are more important to domestic suppliers, enjoy a privileged political position, because benefits to these firms extend indirectly to a broader set of constituents. To test this argument, we match data on anti-dumping petitions from the US with data on linkages between firms in the domestic economy. We provide evidence that firms are more likely to see petitions accepted for products that draw on a larger set of suppliers, thus extending the benefits of protectionist policy across firms. The findings point to the relevance of domestic production networks in politics, complement a growing literature on the role of firms and trade politics, and offer a new explanation of differences in the political influence of firms.

Authors

• Timm Betz, LMU Munich

• Leonhard Hummel, Technical University of Munich