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Antidumping with heterogeneous firms

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  • Christian Gormsen

    ()
    (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

Abstract

This paper analyzes anti¬dumping (AD) policies in a two-country model with heterogeneous firms. One country enforces AD so harshly that firms exporting to the country choose not to dump. In the short run, the country enforcing AD experiences reduced com¬petition to the benefit of local firm and detriment of local consum¬ers, but in the long run AD protection attracts new firms, increasing competition and consumer welfare. In the country's trading partner, competition initially increases: Some firms give up exporting, but those that remain will lower their domestic prices. Consumers there¬fore benefit in the short run. In the long run, however, fewer firms will enter the unprotected country, and competition will eventually decrease, resulting in welfare losses.

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Bibliographic Info

Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number hal-00663024.

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Date of creation: 01 Nov 2011
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Publication status: Published, Economie Internationale, 2011, 125, 1, 41-64
Handle: RePEc:hal:cesptp:hal-00663024

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Keywords: Trade policy; antidumping; monopolistic competition; hetero¬geneous firms;

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  1. Hylke Vandenbussche & Maurizio Zanardi, 2008. "What explains the proliferation of antidumping laws?," ULB Institutional Repository 2013/169679, ULB -- Universite Libre de Bruxelles.
  2. Peter Egger & Douglas Nelson, . "How Bad is Antidumping?: Evidence from Panel Data," Discussion Papers 07/17, University of Nottingham, GEP.
  3. Maurizio Zanardi, 2006. "Antidumping: a problem in international trade," ULB Institutional Repository 2013/9821, ULB -- Universite Libre de Bruxelles.
  4. Marc J. Melitz & Gianmarco I.P. Ottaviano, 2005. "Market Size, Trade, and Productivity," Development Working Papers 201, Centro Studi Luca d\'Agliano, University of Milano.
  5. Konings, Jozef & Vandenbussche, Hylke, 2008. "Heterogeneous responses of firms to trade protection," Journal of International Economics, Elsevier, vol. 76(2), pages 371-383, December.
  6. Gallaway, Michael P. & Blonigen, Bruce A. & Flynn, Joseph E., 1999. "Welfare costs of the U.S. antidumping and countervailing duty laws," Journal of International Economics, Elsevier, vol. 49(2), pages 211-244, December.
  7. Bruce A. Blonigen, 2006. "Evolving discretionary practices of U.S. antidumping activity," Canadian Journal of Economics, Canadian Economics Association, vol. 39(3), pages 874-900, August.
  8. Wilfried Pauwels & Hylke Vandenbussche & Marcel Weverbergh, 2001. "Strategic Behaviour under European Antidumping Duties," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(1), pages 75-99.
  9. Vandenbussche, Hylke & Zanardi, Maurizio, 2010. "The chilling trade effects of antidumping proliferation," European Economic Review, Elsevier, vol. 54(6), pages 760-777, August.
  10. Jozef Konings & Hylke Vandenbussche, 2009. "Antidumping Protection hurts Exporters:Firm-level evidence from France," LICOS Discussion Papers 24109, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  11. Bown, Chad P. & Prusa, Thomas J., 2010. "U.S. antidumping: much ado about zeroing," Policy Research Working Paper Series 5352, The World Bank.
  12. Haaland, J.I. & Wooton, I., 1995. "Anti-Dumping Jumping: Reciprocal Anti-Dumping and Indutrial Location," Papers 22/95, Norwegian School of Economics and Business Administration-.
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