Strategic Behaviour under European Antidumping Rules
AbstractThis paper analyses how European anti-dumping policy under imperfect competition affects firm behaviour and domestic welfare. Our theoretical model is the first to complement the European empirical literature on anti-dumping policy (see Messerlin (1989), Hindley (1988), Tharakan and Waelbroeck (1994)), and can usefully be compared with recent papers dealing with the effects of US anti-dumping policy (Reitzes (1993), Fischer (1992), Prusa (1994)). We use a two-period Cournot duopoly model with a European and a foreign firm that differ in costs and products. European anti-dumping policy differs from its US counterpart mainly in terms of injury margin calculation and the derivation of the anti-dumping duty. European anti-dumping rules provide the home firm with incentives to either induce or to feign injury. Our results indicate that when the level of protection is endogenous, the strategic trade policy argument for protection need not apply. Our findings also suggest that US anti-dumping rules perform better than European rules in terms of welfare and in terms of protecting domestic value added and employment.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1565.
Date of creation: Feb 1997
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- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- K2 - Law and Economics - - Regulation and Business Law
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- Vandenbussche, Hylke & Veugelers, Reinhilde, 1996.
"European Anti-dumping Policy and the Profitability of National and International Collusion,"
CEPR Discussion Papers
1469, C.E.P.R. Discussion Papers.
- Veugelers, Reinhilde & Vandenbussche, Hylke, 1999. "European anti-dumping policy and the profitability of national and international collusion," European Economic Review, Elsevier, vol. 43(1), pages 1-28, January.
- VEUGELERS, Reinhilde & VANDENBUSSCHE, Hylke, 1997. "European anti-dumping policy and the profitability of national and international collusion," SESO Working Papers 1997005, University of Antwerp, Faculty of Applied Economics.
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