The financial performance of public furniture firms with different positions in antidumping actions

Abstract

The United States has imported a large amount of wooden bedroom furniture from China since the early 2000s. The antidumping investigation in 2003 and administrative reviews in 2010 and 2015 have allowed the antidumping duties to be continuously levied on Chinese firms since 2005. Domestic firms in the United States, however, have been deeply divided on how to address the challenge brought by the import growth. In this research, the event-study method is employed to examine the effects of antidumping actions on the financial performance of selected public furniture firms in the United States, with particular attention being paid to their positions on the trade intervention. The analyses reveal that the abnormal returns are mostly negative, except those for the administrative review in 2010. The positions of these selected public firms in the petition and review indeed have impacts on their financial performance. For those firms that are not on the list of government reports, there is a very limited reaction in the equity market. In most cases, the market does not distinguish between the supporting and dissenting firms. Policy implications of these findings for the growth of furniture industry in the United States are discussed.