Jozef Konings and Hylke Vandenbussche


In this paper we show that Antidumping (AD) Protection can increase productivity growth of domestic firms in import-competing industries. We identify a panel of domestic firms between 1993 and 2003 that at some point during this period are affected by AD initiations. Using a difference-in-difference approach, we find that AD measures raise Total Factor Productivity (TFP) for protected firms by 1.4 to 12.8% depending on the specification used. Moreover, the effect of protection depends on the “distance-to-the-frontier firm” in the industry. While protection raises TFP growth of “laggard” domestic firms, it lowers TFP growth for “efficient” firms that operate close to the efficiency frontier. These results are consistent with recent theoretical work supporting the view that trade policy, under certain conditions can induce technological catching-up.