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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. Maurizio Zanardi, 2004. "Antidumping law as a collusive device," Canadian Journal of Economics, Canadian Economics Association, vol. 37(1), pages 95-122, February.
    2. 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.
    3. Michael P. Leidy & Bernard M. Hoekman, 1990. "Production Effects of Price- and Cost-Based Anti-dumping Laws under Flexible Exchange Rates," Canadian Journal of Economics, Canadian Economics Association, vol. 23(4), pages 873-95, November.
    4. 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.
    5. 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.
    6. Lynda Oswald & Valerie Suslow & Margaret Levenstein & Manuel Pastor, 2003. "International Price-Fixing Cartels and Developing Countries: A Discussion of Effects and Policy Remedies," Working Papers wp53, Political Economy Research Institute, University of Massachusetts at Amherst.
    7. 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.
    8. Prusa, Thomas J., 1992. "Why are so many antidumping petitions withdrawn?," Journal of International Economics, Elsevier, vol. 33(1-2), pages 1-20, August.
    9. Vandenbussche, Hylke & Veugelers, Reinhilde, 1996. "European Anti-dumping Policy and the Profitability of National and International Collusion," CEPR Discussion Papers 1469, C.E.P.R. Discussion Papers.
    10. James Brander & Paul Krugman, 1982. "A 'Reciprocal Dumping' Model of International Trade," Working Papers 513, Queen's University, Department of Economics.
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    12. Clarida, R.H., 1991. "Entry, Dumping and Shakeout," Discussion Papers 1991_13, Columbia University, Department of Economics.
    13. Fischer, Ronald D., 1992. "Endogenous probability of protection and firm behavior," Journal of International Economics, Elsevier, vol. 32(1-2), pages 149-163, February.
    14. 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.
    15. Feinberg, Robert M, 1989. "Exchange Rates and "Unfair Trade."," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 704-07, November.
    16. Anderson, James E, 1992. "Domino Dumping, I: Competitive Exporters," American Economic Review, American Economic Association, vol. 82(1), pages 65-83, March.
    17. Bruce A. Blonigen & Thomas J. Prusa, 2001. "Antidumping," NBER Working Papers 8398, National Bureau of Economic Research, Inc.
    18. 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.
    19. Hartigan, James C., 1994. "Dumping and signaling," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 69-81, January.
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