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Size matters! Who is bashing whom in trade war?

Listed author(s):
  • Miyagiwa, Kaz
  • Song, Huasheng
  • Vandenbussche, Hylke

In this paper we present a dynamic model of trade wars in contingent protection. We find that “market size” matters in trade wars in the sense that countries are more likely to initiate anti-dumping cases against countries having sufficiently smaller home markets relative to their own, but less likely against countries with larger markets. We test this “selective-targeting hypothesis” using World Bank data of worldwide anti-dumping filings during the years 1995–2014, and find strong support for it. Thus, our study indicates the importance of relative market size in understanding recent patterns of anti-dumping filings and contingent protection in world trade.

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File URL: http://www.sciencedirect.com/science/article/pii/S1059056016300284
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Article provided by Elsevier in its journal International Review of Economics & Finance.

Volume (Year): 45 (2016)
Issue (Month): C ()
Pages: 33-45

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Handle: RePEc:eee:reveco:v:45:y:2016:i:c:p:33-45
DOI: 10.1016/j.iref.2016.05.001
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620165

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  11. Martin, Alberto & Vergote, Wouter, 2008. "On the role of retaliation in trade agreements," Journal of International Economics, Elsevier, vol. 76(1), pages 61-77, September.
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  16. Blonigen, Bruce A. & Bown, Chad P., 2003. "Antidumping and retaliation threats," Journal of International Economics, Elsevier, vol. 60(2), pages 249-273, August.
  17. Poonam Gupta, 1999. "Why Do Firms Pay Antidumping Duty?," IMF Working Papers 99/166, International Monetary Fund.
  18. Constantinos Syropoulos, 2002. "Optimum Tariffs and Retaliation Revisited: How Country Size Matters," Review of Economic Studies, Oxford University Press, vol. 69(3), pages 707-727.
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  21. Baomin Dong, 2013. "Cost-Based Anti-dumping as a Repeated Game," The Economic Record, The Economic Society of Australia, vol. 89, pages 95-105, 06.
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