Séminaire GREDEG - Hylke Vandenbussche (KUL Leuven)

"Trade Protection and Input Switching: Firm-Level Evidence from Indian Importers"
Quand ? Le 29-09-2015,
de 14:00 à 15:30
Où ? Salle Picasso
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Hylke Vandenbussche

(KUL Leuven, CEPR)


Jeudi 29 septembre 2015


Résumé : This paper evaluates the effect of trade protection on importers’ use of intermediate inputs. We use a detailed Indian firm-product level dataset with information on raw material inputs which enables us to identify firms that use inputs on which antidumping duties are imposed. Our results show that firms alter their input mix as a consequence of trade protection and move towards inputs on which no antidumping measures are imposed. The consumption of those inputs that fall under protection is on average estimated to drop by around 25-40%, relative to other inputs used by the same firms, in terms of both quantity and value. It is in particular large firms and multi-product firms that change their input mix as a consequence of protection. The alteration on the input side has consequences for the output side and results in product switching, shifting firms’ sales towards products that are made of inputs unaffected by protection. We also show that protection on the input side can result in productivity losses for some firms.


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