Subsidizing Rent-Seeking: Antidumping Protection and the Byrd Amendment

Theoretical comparisons of the welfare consequences of tariffs, subsidies and import licenses rely upon the assumption that firms reap no firm-specific benefits from the imposition of a tariff. This paper conducts an empirical analysis of whether a recent change in U.S. antidumping law known as the Byrd Amendment bestows firm-specific benefits to firms lobbying for tariff protection and, thus, increases the level of rent-seeking in the United States. The results provide strong evidence that industries have chosen to lobby for more tariff protection, or filed more antidumping petitions, since passage of the Byrd Amendment. Moreover, the results suggest that the proportion of industries filing these petitions increased under the law. This suggests that the Byrd Amendment at least partially alleviates free riding incentives