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The signaling power of trade protection

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  • Khatibi, Arastou

Abstract

This paper proposes an empirical analysis to provide new insight into the trade diversion effects of antidumping (AD) policy. Trade diversion is the shift in trade from named countries in an AD investigation to non-named countries. Previous studies have concluded that AD action causes a considerable drop in exports from named countries, however the extent to which trade is diverted to non-named countries is still an open debate. This paper examines to see whether AD action on named countries can have signaling effects on non-named countries. To examine the trade effects on non-named countries, a time series data at an 8-digit product level is constructed for all cases initiated between 1997 and 2003 in the European Union. The paper provides evidence that antidumping policy has signaling effects on non-named imports.

Suggested Citation

  • Khatibi, Arastou, 2014. "The signaling power of trade protection," Economics Letters, Elsevier, vol. 125(2), pages 226-228.
    • Handle: RePEc:eee:ecolet:v:125:y:2014:i:2:p:226-228
    DOI: 10.1016/j.econlet.2014.09.001
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    References listed on IDEAS

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    More about this item

    Keywords

    Antidumping; Trade diversion; Signaling;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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