Creating barriers for foreign competitors: a study of the impact of anti-dumping actions on the performance of U.S. firms

Abstract

This study investigates whether anti‐dumping statutes are effective at improving the performance of U.S. firms. As international trade grows and competitors increasingly cross national borders to enter new markets, U.S. trade law becomes a potentially important tool for managers as they consider how to create barriers for foreign competitors. The results of this study suggest that the anti‐dumping laws significantly increase returns of U.S. firms that pursue anti‐dumping protection. The average petitioner between 1980 and 1992 received a $46 million increase in market value as a result of filing an anti‐dumping petition. However, no significant change in market value was associated with preliminary or final determinations of the International Trade Commission, except when petitions received a negative determination at the final stage of the process. A negative determination at the final stage of the process resulted in a loss of market value. © 1998 John Wiley & Sons, Ltd.

Political activity and firm performance within nonmarket research: A review and international comparative assessment

“…According to , government has the power to define opportunity sets and shape firms' competitive environments. This consequently increases firms' involvement in policy processes in ways that advance their goals (Hillman, 2005) or stifle the competition of their rivals, especially foreign firms wanting to enter their markets (Marsh, 1998). The surge in competition has motivated firms to acquire political capital (Hersch, Netter, & Pope, 2008), an intangible resource that has a positive long-term effect on the fortunes of firms (Hillman, 2005).…”

“…At this stage, firms and other interest groups are able to make inputs by providing specific information about policy preferences to decision makers. According to McKay and Webb-Yackee (2007), competing interests battle it out to influence policy decisions and agency actions, particularly to instigate the imposition of trade barriers and trade protection from foreign competition (Marsh, 1998). Informational strategies include lobbying (Lo, 2003), petitions (Marsh, 1998) andcomments (McKay &Webb-Yackee, 2007).…”

“…According to McKay and Webb-Yackee (2007), competing interests battle it out to influence policy decisions and agency actions, particularly to instigate the imposition of trade barriers and trade protection from foreign competition (Marsh, 1998). Informational strategies include lobbying (Lo, 2003), petitions (Marsh, 1998) andcomments (McKay &Webb-Yackee, 2007). From the reviewed articles, these strategies are not targeted at politicians, but at government agencies where key policy issues are initiated and drafted into proposals for parliamentary and executive approval.…”

“…However policy performance, which measures the performance of firms in the policy arena, is the least studied of all the outcomes in the literature. Articles examining this type of outcome either study the voting patterns of politicians (Liebman & Reynolds, 2006), the difference between proposed and adopted agency rules (McKay & Webb-Yackee, 2007), government bailouts (Faccio, Masulis, & McConnell, 2006) or the outcomes of petitions (Lee & Baik, 2010;Marsh, 1998).…”

“…Consequently, firm performance is dependent on the ability of managers to influence their regulatory environments and exploit their economic markets (Holburn & Vanden Bergh, 2008;Marsh, 1998). As noted by Schuler (1996), a focus on acquiring market resources while neglecting the development of political capital in the nonmarket environment could have a negative toll on competitive advantage.…”