Stock price effects of U.S. trade policy responses to Japanese trading practices in semi-conductors

Over much of the last decade, the United States and Japan have been embroiled in a trade dispute over access to Japanese markets for semi-conductors and downstream products. This study examines stock price reactions for firms affected by a subset of events commencing with the filing of a Section 301 petition by the U.S. Semiconductor Industry Association alleging unfair practices by the Japanese and culminating in the 1986 Trade Agreement. The evidence suggests that U.S. semi-conductor consumers as well as producers benefited from these events.