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Alternative Effects of Antidumping Policy: Should Mexican Authorities be Worried?

  • Alfonso Mendieta

    ()

    (School of Economic and Social Studies, University of East Anglia)

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    Administered protection is not the only outcome of antidumping measures. This paper suggests a basic model of repeated interaction between a domestic and a foreign firm. Competing in prices in the importing market, antidumping action serves as the means to enforce and sustain tacit collusion between the firms. The main result is that price distortions by antidumping policy are a departure point for the achievement of the collusive outcome. Discount factors of future profits are altered relative to those observed under free trade, delaying domestic firm’s propensity to collude and prompting foreign firm’s.

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    File URL: http://www.economiamexicana.cide.edu/num_anteriores/XIV-1/02_ALternative_effects.pdf
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    Article provided by in its journal Economia Mexicana NUEVA EPOCA.

    Volume (Year): XIV (2005)
    Issue (Month): 1 (January-June)
    Pages: 41-69

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    Handle: RePEc:emc:ecomex:v:14:y:2005:i:1:p:41-69
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    1. Leidy, M.P. & Hoekman, B.M., 1988. "Production Effects Of Price And Cost-Based Anti-Dumping Laws Under Flexible Exchange Rates," Working Papers 224, Research Seminar in International Economics, University of Michigan.
    2. James Brander & Paul Krugman, 1980. "A "Reciprocal Dumping" Model of International Trade," Working Papers 405, Queen's University, Department of Economics.
    3. Maurizio Zanardi, 2000. "Antidumping Law as a Collusive Device," Boston College Working Papers in Economics 487, Boston College Department of Economics.
    4. Fischer, Ronald D., 1992. "Endogenous probability of protection and firm behavior," Journal of International Economics, Elsevier, vol. 32(1-2), pages 149-163, February.
    5. Veugelers, Reinhilde & Vandenbussche, Hylke, 1999. "European anti-dumping policy and the profitability of national and international collusion," European Economic Review, Elsevier, vol. 43(1), pages 1-28, January.
    6. Prusa, Thomas J., 1992. "Why are so many antidumping petitions withdrawn?," Journal of International Economics, Elsevier, vol. 33(1-2), pages 1-20, August.
    7. Davies, Stephen W. & McGuinness, Anthony J., 1982. "Dumping at less than marginal cost," Journal of International Economics, Elsevier, vol. 12(1-2), pages 169-182, February.
    8. Finger, J M & Hall, H Keith & Nelson, Douglas R, 1982. "The Political Economy of Administered Protection," American Economic Review, American Economic Association, vol. 72(3), pages 452-66, June.
    9. Michael M. Knetter & Thomas J. Prusa, 2000. "Macroeconomic Factors and Antidumping Filings: Evidence from Four Countries," NBER Working Papers 8010, National Bureau of Economic Research, Inc.
    10. Hartigan, James C., 1994. "Dumping and signaling," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 69-81, January.
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    12. Anderson, James E, 1992. "Domino Dumping, I: Competitive Exporters," American Economic Review, American Economic Association, vol. 82(1), pages 65-83, March.
    13. Robert W. Staiger & Frank A. Wolak, 1989. "Strategic Use of Antidumping Law to Enforce Tacit International Collusion," NBER Working Papers 3016, National Bureau of Economic Research, Inc.
    14. Bruce A. Blonigen & Thomas J. Prusa, 2001. "Antidumping," NBER Working Papers 8398, National Bureau of Economic Research, Inc.
    15. Simon J. Evenett, 2003. "The Failure of the WTO Ministerial Meeting in Cancun: Implications for Further Research," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 4(3), pages 11-17, October.
    16. Richard H. Clarida, 1991. "Entry, Dumping, and Shakeout," NBER Working Papers 3814, National Bureau of Economic Research, Inc.
    17. Reitzes, James D, 1993. "Antidumping Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(4), pages 745-63, November.
    18. Margaret Levenstein & Valerie Suslow & Lynda Oswald, 2003. "International Price-Fixing Cartels and Developing Countries: A Discussion of Effects and Policy Remedies," NBER Working Papers 9511, National Bureau of Economic Research, Inc.
    19. Margaret Levenstein & Valerie Suslow & Lynda Oswald, 2003. "International Price-Fixing Cartels and Developing Countries: A Discussion of Effects and Policy Remedies," William Davidson Institute Working Papers Series 538, William Davidson Institute at the University of Michigan.
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