Premium
Protection des aciéries, bien‐être des aciéries américaines et des consommateurs d'acier en aval: le point de vue de la richesse de l'actionnaire .
Author(s) -
Liebman Benjamin H.,
Tomlin Kasaundra M.
Publication year - 2007
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.1365-2966.2007.00432.x
Subject(s) - shareholder , downstream (manufacturing) , safeguard , welfare , production (economics) , business , monetary economics , market economy , economics , corporate governance , international trade , finance , microeconomics , marketing
. This paper analyses the steel safeguards applied during 2001–3. Results reveal that for shareholders of U.S. steel companies safeguards generated positive ‘abnormal’ returns of approximately 6%. The cancellation of the safeguards resulted in wealth gains of about 5%. Steel shareholders experienced negative abnormal returns of −5% in response to the WTO ruling that the U.S. had violated WTO law. Our results are consistent with the neoclassical view that producers gain at the expense of consumers. Also, findings indicate that downstream‐consuming firms that diversify production in NAFTA countries avert some trade policy risk associated with higher steel costs caused by safeguard protection.