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What explains the proliferation of antidumping laws

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  • Hylke Vandenbussche
  • Maurizio Zanardi

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 ULB -- Universite Libre de Bruxelles in its series ULB Institutional Repository with number 2013/9819.

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Date of creation: 2008
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Publication status: Published in: Economic Policy (2008) v.23 n° 53,p.93-138
Handle: RePEc:ulb:ulbeco:2013/9819

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References

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Citations

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Cited by:
  1. Dinlersoz, Emin & Dogan, Can, 2010. "Tariffs versus anti-dumping duties," International Review of Economics & Finance, Elsevier, vol. 19(3), pages 436-451, June.
  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. 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.
  4. 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).
  5. Christian Gormsen, 2011. "Anti-dumping with heterogeneous firms," Economie Internationale, CEPII research center, issue 125, pages 41-64.
  6. Vandenbussche, Hylke & Zanardi, Maurizio, 2010. "The chilling trade effects of antidumping proliferation," European Economic Review, Elsevier, vol. 54(6), pages 760-777, August.
  7. Alberto Martin & Wouter Vergote, 2005. "On the role of retaliation in trade agreements," Economics Working Papers 914, Department of Economics and Business, Universitat Pompeu Fabra, revised Apr 2008.
  8. Konings, Joep & Vandenbussche, Hylke, 2009. "Antidumping protection hurts exporters: firm-level evidence from France," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/237087, Katholieke Universiteit Leuven.
  9. Hartigan, James & Vandenbussche, Hylke, 2010. "Why does the WTO have an antidumping agreement?," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/283002, Katholieke Universiteit Leuven.

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