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Injury Investigations in Anti-Dumping and the Super-Additivity Effect: A Theoretical Explanation

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  • Poonam Gupta
  • Arvind Panagariya

Abstract

Empirical evidence shows that injury investigations in anti-dumping cases conducted by the United States International Trade Commission, the probability of a positive finding is higher when the number of defendant firms is larger, holding constant their total market share. In this paper we offer a theoretical explanation of this finding. We show that the presence of many exporters exacerbates the free-rider problem, which leads every firm to invest less on defense. Thus for the same market share, injury finding is more likely to be positive for many small sellers than a few large sellers.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 01/110.

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Length: 13
Date of creation: 01 Aug 2001
Date of revision:
Handle: RePEc:imf:imfwpa:01/110

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  1. James Brander & Paul Krugman, 1980. "A "Reciprocal Dumping" Model of International Trade," Working Papers 405, Queen's University, Department of Economics.
  2. Wendy L. Hansen & Thomas J. Prusa, 1995. "Cumulation and ITC Decision-Making: The Sum of the Parts is Greater thanthe Whole," NBER Working Papers 5062, National Bureau of Economic Research, Inc.
  3. Panagariya, Arvind & Rodrik, Dani, 1993. "Political-Economy Arguments for a Uniform Tariff," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(3), pages 685-703, August.
  4. Staiger, Robert W. & Wolak, Frank A., 1992. "The effect of domestic antidumping law in the presence of foreign monopoly," Journal of International Economics, Elsevier, vol. 32(3-4), pages 265-287, May.
  5. Bruce A. Blonigen & Stephen E. Haynes, 1999. "Antidumping Investigations and the Pass-Through of Exchange Rates and Antidumping Duties," NBER Working Papers 7378, National Bureau of Economic Research, Inc.
  6. P. Tharakan & David Greenaway & Joe Tharakan, 1998. "Cumulation and injury determination of the European community in antidumping cases," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 134(2), pages 320-339, June.
  7. Rodrik, Dani, 1986. "Tariffs, subsidies, and welfare with endogenous policy," Journal of International Economics, Elsevier, vol. 21(3-4), pages 285-299, November.
  8. James E. Anderson, 1993. "Domino Dumping, II: Anti-dumping," Boston College Working Papers in Economics 219, Boston College Department of Economics.
  9. repec:att:wimass:9413 is not listed on IDEAS
  10. Robert Staiger & Frank Wolak, 1994. "Measuring Industry Specific Protection: Antidumping in the United States," International Trade 9410004, EconWPA.
  11. Thomas J. Prusa, 1998. "Cumulation and antidumping: A challenge to competition," Departmental Working Papers 199814, Rutgers University, Department of Economics.
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