This is a model of predatory dumping that relies upon a capital market imperfection and an asymmetry in financial resources that favors the foreign firm. The capital market imperfection may prevent the home firm from issuing debt to defend itself against predation. The asymmetry in financial resources may enable the foreign firm to use foreign market profits to underwrite predation. In contrast to cyclical dumping models, predation occurs when foreign demand is high. A home antidumping law incompletely insulates the home firm from predatory dumping. The home antidumping law, however, tends to make predation correspond to cyclical dumping's characteristics.
Volume (Year): 29 (1996)
Issue (Month): 1 (February)
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