nep-eec New Economics Papers
on European Economics
Issue of 2009‒07‒11
23 papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Evaluating the stresses from ECB monetary policy in the euro area By Lee , Jim; Crowley, Patrick M
  2. The communication policy of the European Central Bank: An overview of the first decade By Jakob de Haan; David-Jan Jansen
  3. TFP Growth in Old and New Europe By Michael C. Burda; Battista Severgnini
  4. The EU's Emissions Trading Scheme: A Proto-Type Global System? By Denny Ellerman
  5. Introducing the Euro-STING: Short-Term Indicator of Euro Area Growth By Camacho, Maximo; Pérez-Quirós, Gabriel
  6. Welfare Regime and Social Class Variation in Poverty and Economic Vulnerability in Europe: An Analysis of EU-SILC By Christopher T. Whelan; Bertrand Maitre
  7. Immigration to the Land of Redistribution By Boeri, Tito
  8. The Effect of Pension Generosity on Early Retirement: A Microdata Analysis for Europe from 1967 to 2004 By Justina A. V. Fischer; Alfonso Sousa-Poza
  9. What Affects International Migration of European Science and Engineering Graduates? By de Grip, Andries; Fouarge, Didier; Sauermann, Jan
  10. Regional growth and finance in Europe: Is there a quality effect of bank efficiency? By Hasan, Iftekhar; Koetter , Michael; Wedow, Michael
  11. Services Provision and Temporary Mobility: Freedoms and Regulation in the EU By Bertola, Giuseppe; Mola, Lorenza
  12. Harrod, Balassa and Samuelson (Re)Visit Eastern Europe By Robert J. Sonora; Josip Tica
  13. Long-term Energy Supply Contracts in European Competition Policy: Fuzzy not Crazy By Jean-Michel Glachant; Adrien de Hauteclocque
  14. Delegation of Power and Agency Losses in EU Trade Politics By Eugénia da Conceição-Heldt
  15. Market liberalization in the European Natural Gas Market The importance of capacity constraints and efficiency differences By Steven Brakman; Charles van Marrewijk; Arjen van Witteloostuijn
  16. Spatial Filtering, Model Uncertainty and the Speed of Income Convergence in Europe By Jesus Crespo Cuaresma; Martin Feldkircher
  17. European citizenship after Martinez Sala and Baumbast: Has European law become more human but less social? By Agustín José Menéndez
  18. An empirical study into the norms of good administration as operated by the European Ombudsman in the field of tenders By Magdalena E. de Leeuw
  19. Analyzing female labor supply -- Evidence from a Dutch tax reform By Bosch, Nicole; van der Klaauw, Bas
  20. Lessons from European Union policies for regional development By Shankar, Raja; Shah, Anwar
  21. The use of fixed-term contracts and the labour adjustment in Belgium By Emmanuel Dhyne; Benoit Mahy
  22. Private long term care insurance: Theoretical approach and results applied to the Spanish case By Pablo Alonso González; Irene Albarrán Lozano
  23. Antidumping Protection hurts Exporters:Firm-level evidence from France By Jozef Konings; Hylke Vandenbussche

  1. By: Lee , Jim (Texas A&M University- Corpus Christi); Crowley, Patrick M (Texas A&M University - Corpus Christi)
    Abstract: This paper investigates the extent to which euro area monetary policy has responded to evolving economic conditions in individual member states as opposed to the euro area as a whole. Based on a forward-looking Taylor rule-type policy reaction function, we conduct counterfactual exercises that compare the monetary policy behaviour of the ECB under alternative hypothetical scenarios: (1) the euro member states make individual policy decisions, and (2) the ECB responds to the economic conditions of individual members. Stress measures are then constructed to evaluate the degree of divergence of member state economies under these two hypothetical scenarios. The results we obtain reflect the extent of heterogeneity among the national economies in the monetary union, indicating that euro area policy rates have been particularly close to the ‘counterfactual’ interest rates of the largest euro members and countries with similar economic conditions, namely Germany, Austria, Belgium and France.
    Keywords: European Central Bank; monetary policy reaction; Taylor rule; counterfactual analysis
    JEL: C53 E52
    Date: 2009–04–07
  2. By: Jakob de Haan; David-Jan Jansen
    Abstract: Since its inception, the European Central Bank (ECB) has regarded communication as anintegral part of its monetary policy. This paper describes and evaluates ECB communications during the first decade of its operation.We conclude that, overall, ECB communication has contributed to the effectiveness of its monetary policy. Our review of the literature shows that ECB communications affect the level and volatility of financial prices - suggesting that private sector expectations reacted to ECB communication. In addition, there is evidence that communication has improved the predictability of interest rate decisions. 
    Keywords: communication; European Central Bank; transparency; monetary policy
    JEL: E44 E52 E58
    Date: 2009–06
  3. By: Michael C. Burda; Battista Severgnini
    Abstract: Using Solow-Tornqvist residuals as well as two alternative measurements, we present estimates of total factor productivity (TFP) growth in a sample of 30 European economies for the period 1994-2005. In most of Western Europe, we find a deceleration of TFP growth since 2000. However, the economies of New Europe exhibit a higher level of TFP growth overall and have slowed less than those of Old Europe. In the new market economies of Central and Eastern Europe, we nd both high TFP growth as well as acceleration in the second half of the sample. Regression evidence from Western Europe suggests that product market regulation may adversely aect TFP growth and may thus impair convergence.
    Keywords: Total factor productivity growth, Solow residual, product and labor market regulation
    JEL: D24 O47 P27
    Date: 2009–06
  4. By: Denny Ellerman
    Abstract: The European Union's Emission Trading Scheme (EU ETS) is the world's first multinational cap-and-trade system for greenhouse gases. As an agreement between sovereign nations with diverse historical, institutional, and economic circumstances, it can be seen as a prototype for an eventual global climate regime. Interestingly, the problems that are often seen as dooming a global trading system - international financial flows and institutional readiness - haven't appeared in the EU ETS, at least not yet. The more serious problems that emerge from the brief experience of the EU ETS are those of (1) developing a central coordinating organization, (2) devising side benefits to encourage participation, and (3) dealing with the interrelated issues of harmonization, differentiation, and stringency. The pre-existing organizational structure and membership benefits of the European Union provided convenient and almost accidental solutions to the need for a central institution and side benefits, but these solutions will not work on a global scale and there are no obvious substitutes. Furthermore, the EU ETS is only beginning to test the practicality of harmonizing allocations within the trading system, differentiating responsibilities among participants, and increasing the stringency of emissions caps. The trial period of the EU ETS punted on these problems, as was appropriate for a trial period, but they are now being addressed seriously. From a global perspective, the answers that are being worked out in Europe will say a great deal about what will be feasible on a broader, global scale.
    Keywords: energy policy; environmental policy
    Date: 2009–02–15
  5. By: Camacho, Maximo; Pérez-Quirós, Gabriel
    Abstract: We set out a model to compute short-term forecasts of the euro area GDP growth in real-time. To allow for forecast evaluation, we construct a real-time data set that changes for each vintage date and includes the exact information that was available at the time of each forecast. With this data set, we show that our simple factor model algorithm, which uses a clear, easy-to-replicate methodology, is able to forecast the euro area GDP growth as well as professional forecasters who can combine the best forecasting tools with the possibility of incorporating their own judgement. In this context, we provide examples showing how data revisions and data availability affect point forecasts and forecast uncertainty.
    Keywords: Business cycle; Forecasting; Time Series
    JEL: C22 E27 E32
    Date: 2009–06
  6. By: Christopher T. Whelan (University College Dublin); Bertrand Maitre (ESRI)
    Abstract: In this paper we address a set of interrelated issues. These comprise the relative merits of unidimensional versus multidimensional approaches to poverty and social exclusion, increasing concerns about reliance on nationally based income poverty measures in the context of EU-enlargement and the continuing relevance of class based explanations of variation in life chances. Employing the EU-SILC data set, we identify for each of a set of welfare regimes a group of economically vulnerable individuals. Contrary to the situation with national income poverty measures, levels of economic vulnerability vary systematically across welfare regimes. The multidimensional profile of the economically vulnerable sharply differentiates them from the remainder of the population. Unlike the national relative income approach, the focus on economic vulnerability produces a pattern of class differentiation that is not dominated by the contrast between the property owning classes and all others. In contrast to a European-wide relative income approach, it also simultaneously captures the fact that absolute levels of vulnerability are distinctively high among the lower social classes in the less affluent regimes while class relativities are significantly sharper in the more affluent regimes. No single indicator is likely to prove adequate in capturing the diversity of experience of poverty and social exclusion in an enlarged European Union. The most effective strategy may be to take more seriously the need to translate the conceptually compelling case for a multidimensional approach to social exclusion into an appropriate set of operational alternatives.
    Date: 2009–06
  7. By: Boeri, Tito (Bocconi University)
    Abstract: Negative perceptions about migrants in Europe, the Continent with the largest social policy programmes, are driven by concerns that foreigners are a net fiscal burden. Paradoxically instruments of social inclusion are becoming a weapon of mass exclusion. Increasing concerns of public opinion are indeed pressing Governments, in the midst of the recession, to reduce welfare access by migrants or further tighten migration policies. Are there politically feasible alternatives to these two hardly enforceable (and procyclical) policy options? In this paper we look at economic and cultural determinants of negative perceptions about migrants in Europe. Based on a simple model of the perceived fiscal effects of migration and on a largely unexploited database (EU-Silc), we find no evidence that legal migrants, notably skilled migrants, are net recipients of transfers from the state. However, there is evidence of "residual dependency" on non-contributory transfers and self-selection of migrants more likely to draw on welfare in the countries with the most generous welfare state. Moreover, redistribution does not find much support among those who are in favour of immigration. A way out of the migration into the welfare state dilemma facing Europe involves i. co-ordinating safety nets across the EU, ii. adopting explicitly selective migration policies, and iii. improving activation programmes. Other options – such as restricting migration or welfare access by migrants – are however on the agenda of national Governments.
    Keywords: migration policy, welfare access, fiscal externality
    JEL: J38 J5
    Date: 2009–06
  8. By: Justina A. V. Fischer; Alfonso Sousa-Poza
    Abstract: Using pseudo-panel microdata we show that pension generosity affects early retirement decisions. The changes in the average replacement rate and decreases in wealth accrual between 1967 and 2004 have caused an increase in early retirement probabilities from 16% to 63%.
    Keywords: Early Retirement; Pension Systems; Pension Neutrality; Pension Generosity; SHARE
    JEL: J26 J21 H55
    Date: 2009–06
  9. By: de Grip, Andries (ROA, Maastricht University); Fouarge, Didier (ROA, Maastricht University); Sauermann, Jan (ROA, Maastricht University)
    Abstract: Using a dataset of science and engineering graduates from 12 European countries, we analyse the determinants of labour migration after graduation. We find that not only wage gains are driving the migration decision, but also differences in labour market opportunities, past migration experience, and international student exchange are strong predictors of future migration. Contrary to our expectations, job characteristics such as the utilisation of skills in the job and involvement in innovation hardly affect the migration decision. When analysing country choice, countries such as the USA, Canada and Australia appear to attract migrants due their larger R&D intensity. Moreover, graduates with higher grades are more likely to migrate to these countries.
    Keywords: migration, university graduates, scientists & engineers
    JEL: F22 J61
    Date: 2009–06
  10. By: Hasan, Iftekhar (Lally School of Management and Technology, USA, and Bank of Finland Research); Koetter , Michael (University of Groningen and Deutsche Bundesbank); Wedow, Michael (Deutsche Bundesbank)
    Abstract: In this study, we test whether regional growth in 11 European countries depends on financial development and suggest the use of cost- and profit-efficiency estimates as quality measures for financial institutions. Contrary to the usual quantitative proxies for financial development, the quality of financial institutions is measured in this study as the relative ability of banks to intermediate funds. An improvement in bank efficiency spurs five times more regional growth than does an identical increase in credit. More credit provided by efficient banks exerts an independent growth effect in addition to the direct quantity and quality channel effects.
    Keywords: bank performance; regional growth; bank efficiency; Europe
    JEL: G21 O16 O47 O52
    Date: 2009–05–18
  11. By: Bertola, Giuseppe; Mola, Lorenza
    Abstract: International posting of workers and mobility of self-employed service suppliers lie between outright migration and trade in goods: their regulation, for both distributional and market-correcting purposes, is not as difficult to harmonize as that of labour markets, but personal mobility is more visible and socially intrusive than product market interactions. This paper analyzes economic and legal tensions between national regulatory frameworks and international competition in these areas, in both the intra-EU and global contexts, highlighting how interactions between the external and internal roles of the European Commission may foster efficient integration of markets and policies in this and other fields.
    Keywords: Economic integration; European Union; GATS; Harmonization; Labour regulation; Posted workers.; Services regulation; Trade in services
    JEL: F22 J61
    Date: 2009–06
  12. By: Robert J. Sonora (Department of Economics, School of Business Administration, Fort Lewis College); Josip Tica (Faculty of Economics and Business, University of Zagreb)
    Abstract: In this paper we investigate Harrod Balassa Samuelson (HBS) effect in 11 transition countries. A large number of empirical papers based on quite limited datasets has already been published on HBS in Eastern Europe. The major contribution of this paper is the fact that we estimate HBS with NACE6 quarterly national account data which enables us to divide data into tradable and nontradable sector as suggested by De Gregorio, Giovannini and Wolf (1994) without any unrealistic assumptions. Following Bergstrand (1991) together with relative productivity we also employ share of government consumption in GDP as an explanatory variable. Unlike in previous studies, results have indicated that it is possible to find univariate cointegrating vectors only in Bulgaria, Croatia and Lithuania, and panel cointegration test has indicated that it is possible to find strong evidence of cointegration in post 2000 sample. For the post 1995 period, rejection of the null hypothesis is dependent on the inclusion of government consumption as independent variable and methodology used (DOLS vs. OLS cointegration test).
    Keywords: Harrod Balassa Samuelson effect, Price convergence, Transition countries, panel cointegration tests
    JEL: F15 F21 F43
    Date: 2009–06–24
  13. By: Jean-Michel Glachant; Adrien de Hauteclocque
    Abstract: Long-term supply contracts often have ambiguous effects on the competitive structure, investment and consumer welfare in the long term. In a context of market building, these effects are likely to be worsened and thus even harder to assess. Since liberalization and especially since the release of the Energy Sector Enquiry in early 2007, the portfolio of long-term supply contracts of the former incumbents have become a priority for review by the European Commission and the national competition authorities. It is widely believed that European Competition authorities take a dogmatic view on these contracts and systemically emphasize the risk of foreclosure over their positive effects on investment and operation. This paper depicts the methodology that has emerged in the recent line of cases and argues that this interpretation is largely misguided. It shows that a multiple-step approach is used to reduce regulation costs and balance anti-competitive effects with potential efficiency gains. However, if an economic approach is now clearly implemented, competition policy is constrained by the procedural aspect of the legal process and the remedies imposed remain open for discussion.
    Keywords: energy policy; competition policy
    Date: 2009–02–15
  14. By: Eugénia da Conceição-Heldt
    Abstract: This paper addresses the problem of agency losses (agency shirking and agency slippage) in the process of power delegation in EU trade policy. The central question is whether a conflictual situation exists between the interests of the member states and those of the European Commission (agency shirking), or whether the structure of delegation in itself stimulates the agent to adopt a different position from the principals (agency slippage). Drawing on the principal-agent approach, I argue that agency losses are due to the structure of delegation and that the existence of multiple principals with diverging preferences facilitates agency. I find empirical evidence that the Council-Commission relationship on trade politics has different dynamics depending on the negotiating stage. In the initial negotiating stage, when defining the negotiating mandate of the Commission, the relationship is cooperative. Conflict between the Commission and the Council only breaks out in a latter stage of negotiations, when the Commission makes concessions at the international level.
    Keywords: trade policy; agriculture policy; European Council; European Commission
    Date: 2009–03–15
  15. By: Steven Brakman; Charles van Marrewijk; Arjen van Witteloostuijn
    Abstract: In the European Union, energy markets are increasingly being liberalized. A case in point is the European natural gas industry. The general expectation is that more competition will lead to lower prices and higher volumes, and hence higher welfare. This paper indicates that this might not happen for at least two reasons. First, energy markets, including the market for natural gas, are characterized by imperfect competition and increasing costs to develop new energy sources. As a result, new entrants in the market are less efficient than incumbent firms. Second, energy markets, again including the market for natural gas, are associated with capacity constraints. Prices are determined in residual markets where the least efficient firms are active. This is likely to lead to price increases, rather than decreases.
    Keywords: natural gas, capacity constraints, efficiency, market liberalization
    JEL: Q4 L1 L7
    Date: 2009–07
  16. By: Jesus Crespo Cuaresma; Martin Feldkircher
    Abstract: In this paper we put forward a Bayesian Model Averaging method dealing with model uncertainty in the presence of potential spatial autocorrelation. The method uses spatial filtering in order to account for different types of spatial links. We contribute to existing methods that handle spatial dependence among observations by explicitly taking care of uncertainty stemming from the choice of a particular spatial structure. Our method is applied to estimate the conditional speed of income convergence across 255 NUTS-2 European regions for the period 1995-2005. We show that the choice of a spatial weight matrix - and in particular the choice of a class thereof - can have an important effect on the estimates of the parameters attached to the model covariates. We also show that estimates of the speed of income convergence across European regions depend strongly on the form of the spatial patterns which are assumed to underly the dataset. When we take into account this dimension of model uncertainty, the posterior distribution of the speed of convergence parameter appears bimodal, with a large probability mass around no convergence (0% speed of convergence) and a rate of convergence of 1%, approximately half of the value which is usually reported in the literature.
    Keywords: Model uncertainty, spatial filtering, determinants of economic growth, European regions.
    JEL: C11 C15 C21 R11 O52
    Date: 2009–06
  17. By: Agustín José Menéndez
    Abstract: Martínez Sala and Bambaust have become the leading cases on free movement of persons in Community law. It has become standard to see both rulings as heralding a ‘civic’ turn of European integration, by expanding the personal scope of the freedom of personal movement from workers to citizens, and thus redefining the value basis of the law of the European Union. This would prove again the emancipatory potential of Community law, closely related to its redrawing the economic and political boundaries of Europe, and getting rid of discriminatory obstacles in the way of citizens’ freedom. This paper contests this interpretation. It shows why Martínez Sala and Baumbast are not epochal judgments, but logical extensions of the pre-Maastricht case of the Court. Furthermore, it reveals why and how Martínez Sala and Baumbast have radicalised the processes of Europeanisation of what used to be exclusive national competences, and the judicialisation of decision-making processes where representative institutions used to have the exclusive word. This has rather negative consequences, both in terms of the democratic legitimacy of the Union and the distributive consequences of Community law. European law may have become more humane only at the expense of its being less social, to the extent it imports a non-solidaristic logic into provinces of the legal system before sheltered from economic pressure, and may end up forcing a social retrenchment. The market citizen has not been overcome, but has only been dressed in political clothes.
    Keywords: acquis communautaire; directives; Europeanization; European citizenship; European law; immigration policy; Social Charter; social democracy; social policy; social regulation
    Date: 2009–06–15
  18. By: Magdalena E. de Leeuw
    Abstract: This Working Paper presents the results of the empirical research which I have conducted into the norms of good administration that are operated by the European Ombudsman in the field of tenders. The aim of the research was to discover whether the European Ombudsman is actively involved in creating norms of good administration in individual decisions, and in the end to make an inventory of the norms of good administration that have been operated by the Ombudsman to decide complaints about maladministration in this policy field. This empirical research is based upon a normative vision on the European Ombudsman as a developer of norms of good administration. The European Ombudsman has his own task and responsibility in respect of the review of administrative behaviour which is different from the task and responsibility of the Court. Administrative bodies do not only have to act lawfully, but also properly, i.e. in accordance with the principle of good administration. In my view the European Ombudsman has his own responsibility in autonomously developing the standard of good administration (and developing 'Ombudsnorms') and to review administrative behaviour for compliance with that ethical standard.
    Keywords: European Ombudsman
    Date: 2009–04–15
  19. By: Bosch, Nicole; van der Klaauw, Bas
    Abstract: Among OECD countries, the Netherlands has average female labor force participation, but by far the highest rate of part-time work. This paper investigates the extent to which married women respond to financial incentives. We exploit the exogenous variation caused by a substantial Dutch tax reform in 2001. Our main conclusion is that the positive significant effect of tax reform on labor force participation dominates the negative insignificant effect on working hours. Our preferred explanation is that women respond more to changes in tax allowances than to changes in marginal tax rates.
    Keywords: endogeneity; labor force participation; Uncompensated wage elasticity; working hours
    JEL: H24 J22 J38
    Date: 2009–06
  20. By: Shankar, Raja; Shah, Anwar
    Abstract: Regional disparities present an ever present development challenge in most countries, especially those with large geographic areas under their jurisdiction. A neglect of these inequities may create the potential for disunity and, in extreme cases, for disintegration. In view of this, most countries actively pursue policies with a view to helping lagging regions catch up with faster growing regions. These policies have at best a mixed record of success. It is therefore useful to discern what type of policies work and why? In this context learning from the experience of the European Union (EU) may be particularly instructive as, over the years, it has provided significant support to assist poorer regions achieve convergence with the richer regions. This paper reviews the impact of EU policies for regional development to draw lessons of interest to other countries pursuing similar goals. The paper concludes that policies that serve to create an internal common market by creating a level playing field that enables poorer regions to integrate with the broader national and global economies have the best potential to advance regional income convergence. In this context, removal of barriers to trade and factor mobility and providing enhanced access to information and technology to the lagging regions should be main policy priorities for regional development.
    Keywords: Regional Rural Development,Trade and Regional Integration,Political Economy,Economic Theory&Research,Debt Markets
    Date: 2009–06–01
  21. By: Emmanuel Dhyne (National Bank of Belgium, Research Department; Warocqué Research Center, Université de Mons); Benoit Mahy (Warocqué Research Center, Université de Mons; Département d’Economie Appliquée, Université Libre de Bruxelles)
    Abstract: This paper aims to document and analyse the use of fixed-term contracts (FTC) and to analyse the dynamics of labour adjustment by type of labour contract at the firm level, drawing on the detailed breakdown of both the labour force and labour entries and exits that are available in the "Belgian Firms' Social Balance Sheets" dataset. It also aims to investigate the structure of labour adjustment costs by type of labour contract, using the methodology proposed by Goux, Maurin and Pauchet (2001). Results first indicate that flexible labour contracts are not only used to facilitate short-term labour adjustment but also as a screening device. The findings also suggest that when a firm decides to introduce flexible labour into its production process, it does also this to meet long-run objectives such as implementing minimising costs innovations. It is further estimated that the introduction of FTCs does not seem to affect the speed of indefinite-term contracts (ITC) adjustment. Our results also tend to indicate that the FTC is a key adjustment variable in response to cost shocks and to unexpected demand fluctuations while, in response to expected fluctuations in output, firms then prefer to adjust their level of permanent employment. Finally, and as far as the structure of labour adjustment costs in Belgium is concerned, the marginal recruitment cost under an ITC represents 12.4% of the marginal termination cost of ITC, while the marginal cost associated with the recruitment under an FTC only accounts for 0.8% of its ITC counterpart
    Keywords: labour dynamics, fixed-term contract, indefinite-term contract, agency workers
    JEL: J23 J32 J63 J82
    Date: 2009–07
  22. By: Pablo Alonso González (Departamento de Estadística, Estructura y O.E.I. Universidad de Alcalá.); Irene Albarrán Lozano (Departamento de Estadística, Universidad Carlos III de Madrid.)
    Abstract: The passing of the Law 39/2006 has given to Spanish insurance companies the chance of offering products that cover the expenses associated to the risk of dependence. However, due to the lack of reliable statistic information about dependent population, it is extremely difficult to evaluate not only the frequency but also the cost. These two items make the pricing process with a big cloud of uncertainty. This paper proposes a methodology for premium calculation taking into account not only the availability of the data but also the current legal framework in Spain. Together to the theoretical approach, premium calculations for two possible versions are included. Finally, it is introduced a simulation model that pretends to evaluate the impact that a portfolio with these kind of contracts would have on the solvency of an insurance company.
    Keywords: Long term care insurance, Pricing, Multi-state model, Simulation, Solvency.
    JEL: G22 C39 C15 C63
    Date: 2009
  23. By: Jozef Konings; Hylke Vandenbussche
    Abstract: This paper empirically evaluates the effects of antidumping measures on the exports of protected firms. While antidumping protection raises the domestic sales of the more “traditional” non-exporting firms on the protected market with about 5%, it negatively affects the firm-level exports of similar products as the protected ones. Export sales of protected firms fall by almost 8% compared to a relevant control group of unprotected firms. The drop in firm-level exports more than doubles for firms that are global, i.e. firms with foreign affiliates. Measured at the product-level, extra-EU exports of goods protected by antidumping fall by 36% while exports to target countries fall by as much as 66% following protection. Protection also affects the extensive margin of exporters but to a lesser extent. Initial exporters face a marginally higher probability to stop exporting during protection compared to unprotected firms. Finally, we find that the productivity of exporters falls while that of non-exporters rises during antidumping protection. We offer a number of plausible explanations for our findings arising from the heterogeneous firm literature. We also discuss the importance of our findings for policy.
    Keywords: Antidumping, firm-level exports, intensive margin, extensive margin, productivity, dif-in dif
    JEL: F13 L O30 C2
    Date: 2009

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