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Dumping in a Global World

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Author Info

  • Jose Luis Moraga-Gonzalez

    ()
    (Groningen University)

  • Jean-Marie Viaene

    ()
    (Faculty of Economics, Erasmus Universiteit Rotterdam)

Abstract

Anti-dumping actions are now the trade policy of choice of developing and transition economies. To understand why these economies have increasingly applied anti-dumping laws, we build a simple theoretical model of vertical intra-industry trade and investigate the strategic incentives of exporting firms to undertake dumping. We show that the definition of dumping matters. Based on a comparison of low-quality and high-quality prices, only unilateral dumping by the low-quality firm obtains. By contrast, the standard WTO definition leads to either reciprocal or unilateral dumping by the high-quality firm, depending on cross-country differences in incomes, the height of tariff protection and on exchange rate changes. See publication in The World Economy , 2005, 28(5), 669-682.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 04-128/2.

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Date of creation: 24 Nov 2004
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Handle: RePEc:dgr:uvatin:20040128

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Web page: http://www.tinbergen.nl

Related research

Keywords: Dumping; Exchange Rate; Injury; Product Quality; Tariffs;

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  1. Jose Luis Moraga-Gonzalez & Jean-Marie Viaene, 2004. "Anti-dumping, Intra-industry Trade and Quality Reversals," Tinbergen Institute Discussion Papers 04-124/2, Tinbergen Institute.
  2. Jose Luis Moraga-Gonzalez & Jean-Marie Viaene, 2004. "Dumping in Developing and Transition Economies," Tinbergen Institute Discussion Papers 04-125/2, Tinbergen Institute.
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