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What Explains the Proliferation of Antidumping Laws ?

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  • Hylke, VANDENBUSSCHE

    (UNIVERSITE CATHOLIQUE DE LOUVAIN - Department of Economics and CORE, KULeuven, CEPR)

  • Maurizio, ZANARDI

    (Tilburg University and CentER)

Abstract

A recent phenomenon is the rapid spread of Antidumping (AD) laws mainly amongst developing countries ‘i.e. China, India, Mexico). Between 1980 and 2003 the number of countries in the world with an AD law more than doubled going from 36 to 97 countries. This proliferation of trade protection laws amongst developing countries is likely to have substantial implications for trade as recently shown by Vandenbussche and Zanardi (2007). The purpose of this paper is to use a duration analysis to investigate the determinants leading a country to adopt an AD law. We also analyze the related question of what explains the heterogeneity between countries that can be observed in terms of the time between adoption and their first use of the AD law. We find strong evidence that retaliatory motives are at the heart of the proliferation decision as countries that were targeted by AD actions of traditioal users in the past (i.e., US, EU) are much more likely to adopt an AD law. Also, our evidence suggests that past trade liberalization substantially increases the probability of a country to adopt an AD law. In addition, we find that the size of the chemicals sector and the extent of steel imports are positively correlated with the probability to adopt. The amount of inward FDI on the other hand has a clear negative effect on the probability to adopt. While short term macroeconomic factors like GDP growth and exchange rate volatility seem to matter less for adoption, asymmetric regional shocks and the development level of a country seem to raise the probability of starting to use an AD law. Our results are robust to several specifications of duration models.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2007027.

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Length: 46
Date of creation: 01 Sep 2007
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Handle: RePEc:ctl:louvec:2007027

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Keywords: Antidumping; trade liberalization; GATT/WTO;

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References

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Citations

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Cited by:
  1. Kaz Miyagiwa & Aminata Sissoko, 2013. "The free-rider problem and the optimal duration of research joint ventures: theory and evidence from the Eureka program," Working Papers 1302, Florida International University, Department of Economics.
  2. Bown, Chad P. & Tovar, Patricia, 2011. "Trade liberalization, antidumping, and safeguards: Evidence from India's tariff reform," Journal of Development Economics, Elsevier, vol. 96(1), pages 115-125, September.
  3. Hylke Vandenbussche & Maurizio Zanardi, 2010. "The chilling trade effects of antidumping proliferation," ULB Institutional Repository 2013/136355, ULB -- Universite Libre de Bruxelles.
  4. MARTIN, Alberto & VERGOTE, Wouter, . "On the role of retaliation in trade agreements," CORE Discussion Papers RP -2037, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Dinlersoz, Emin & Dogan, Can, 2010. "Tariffs versus anti-dumping duties," International Review of Economics & Finance, Elsevier, vol. 19(3), pages 436-451, June.
  6. Christian Gormsen, 2011. "Antidumping with heterogeneous firms," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00663024, HAL.
  7. Bown, Chad P. & Karacaovali, Baybars & Tovar, Patricia, 2014. "What do we know about preferential trade agreements and temporary trade barriers ?," Policy Research Working Paper Series 6898, The World Bank.
  8. Jozef KONINGS & Hylke VANDENBUSSCHE, 2009. "Antidumping Protection hurts Exporters: Firm-level evidence from France," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2009017, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  9. Jozef Konings & Hylke Vandenbussche, 2013. "Antidumping protection hurts exporters: firm-level evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 149(2), pages 295-320, June.
  10. Robert Feinberg, 2013. "Antidumping and Industrial Organization," Review of Industrial Organization, Springer, vol. 42(4), pages 365-368, June.

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