PROTEXPO · Protection and Exports

Protection and Exports

This project aims to resolve two themes: (i) how firms' imports activity affect the product quality of exported products; and (ii) how firms adjust their export behavior, particularly product quality, in response to the time-varying and market-specific trade policy shocks stemming from the imposition of antidumping (AD) measures. These questions are essential because firms do not operate in a vacuum and trade policies evolve. While it is well-known that China's accession to WTO has spurred its exceptional growth in export, the growth in import is no less astounding. However, literature to date has dedicated to less attention on the effect of imports on firm export outcomes. The first objective of this project seeks to determine whether the connection between imports and exports is causal rather than a byproduct of trade. With respect to AD policy, it has emerged as one of the most intensive used form of trade protection in the trade policy arena since the mid-1990s, and meanwhile China has been the world's top target country of AD sanction. While there have been voluminous research examining AD activities, there remain many insights to be gained from examining its usage, especially when it comes to China's exports experience. The second objective of this project intends to provide an in-depth analysis of the evolution of AD activities since the 1980s, with a particular focus on the emergence of China as a major target of administered trade protection by the European Union (EU) and the United States (US). Moreover, recent literature has gained significant insights into the effectiveness of AD in protecting firms and jobs, the ways these trade restrictions shape targeted firms' export behavior remains poorly understood. The third objective of this project attempts to shed new light on the patterns of export adjustments to AD shocks among firms that were hit with such trade restrictions. The analysis of how targeted firms respond to such trade restrictions not only allows us to paint a complete assessment of such trade policy but also is relevant for policy, in particular in light of the heated discussion on whether the EU should grant China market economy status (MES). A better understanding of the interconnections between targeted firms' export adjustments and temporary trade protections is crucial for designing appropriate policy interventions.

Data: CORDIS, © European Union