Undertakings and Antidumping Jumping FDI in Europe
This paper studies the effects of EU antidumping policy when foreign firms have the possibility to 'jump' antidumping measures by engaging in foreign direct investment (FDI) in the EU. Using a multi-stage framework, we study the EU administration's choice between an antidumping duty and a price-undertaking, taking into account the effect of these measures on the location decision of the foreign firm and the subsequent price competition between local and foreign firms. Our findings suggest that the EU administration acting purely in the EU industry's interest prefers a price-undertaking to a duty, if the latter leads to 'duty jumping' FDI. FDI toughens price competition in the EU market and leaves local firms worse off. Antidumping jumping FDI will only occur if the EU administration has broader objectives than just protecting the profitability of EU industry, if fixed costs of FDI are not too high, and if the cost advantage of foreign firms are, at least partially, firm-specific and transferable abroad. If foreign firms are able to act strategically taking into account EU antidumping policy, the presence of antidumping law can also discourage FDI that would have taken place under free trade conditions.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|Date of creation:||Dec 1999|
|Date of revision:|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Motta, Massimo, 1992. "Multinational firms and the tariff-jumping argument : A game theoretic analysis with some unconventional conclusions," European Economic Review, Elsevier, vol. 36(8), pages 1557-1571, December.
- Levinsohn, James A., 1989. "Strategic trade policy when firms can invest abroad: When are tariffs and quotas equivalent?," Journal of International Economics, Elsevier, vol. 27(1-2), pages 129-146, August.
- Sleuwaegen, Leo & Belderbos, Rene & Jie-A-Joen, Clive, 1998.
"Cascading contingent protection and vertical market structure,"
International Journal of Industrial Organization,
Elsevier, vol. 16(6), pages 697-718, November.
- Rene Belderbos & Clive Jie a Joen & Leo Sleuwaegen, 1995. "Cascading Contigent Protection and Vertical Market Structure," Discussion Paper Series a310, Institute of Economic Research, Hitotsubashi University.
- Collie, D. & Vandenbussche, H., 1999.
"Trade, FDI, and unions,"
1999-42, Tilburg University, Center for Economic Research.
- Blomstrom, Magnus & Kokko, Ari, 1998.
" Multinational Corporations and Spillovers,"
Journal of Economic Surveys,
Wiley Blackwell, vol. 12(3), pages 247-77, July.
- Blomström, Magnus & Kokko, Ari, 1996. "Multinational Corporations and Spillovers," CEPR Discussion Papers 1365, C.E.P.R. Discussion Papers.
- Blomström, Magnus & Kokko, Ari, 1996. "Multinational Corporations and Spillovers," SSE/EFI Working Paper Series in Economics and Finance 99, Stockholm School of Economics.
- Tharakan, P. K. M., 1991. "The political economy of anti-dumping undertakings in the European communities," European Economic Review, Elsevier, vol. 35(6), pages 1341-1359, August.
- Campa, Jose & Donnenfeld, Shabtai & Weber, Shlomo, 1998. "Market Structure and Foreign Direct Investment," Review of International Economics, Wiley Blackwell, vol. 6(3), pages 361-80, August.
- Bruce A. Blonigen & Thomas J. Prusa, 2001. "Antidumping," NBER Working Papers 8398, National Bureau of Economic Research, Inc.
- Konishi, Hideo & Saggi, Kamal & Weber, Shlomo, 1999. "Endogenous trade policy under foreign direct investment," Journal of International Economics, Elsevier, vol. 49(2), pages 289-308, December.
- P.K.M. Tharakan, 1999. "Is Anti-Dumping Here to Stay?," The World Economy, Wiley Blackwell, vol. 22(2), pages 179-206, 03.
- Brander, James A. & Spencer, Barbara J., 1987. "Foreign direct investment with unemployment and endogenous taxes and tariffs," Journal of International Economics, Elsevier, vol. 22(3-4), pages 257-279, May.
- Bhagwati, Jagdish N. & Brecher, Richard A. & Dinopoulos, Elias & Srinivasan, T. N., 1987. "Quid pro quo foreign investment and welfare : A political-economy-theoretic model," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 127-138, October.
- René Belderbos, 1997. "Antidumping and tariff Jumping: Japanese firms’ DFI in the European union and the United States," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(3), pages 419-457, September.
- Barrell, Ray & Pain, Nigel, 1999. "Trade restraints and Japanese direct investment flows," European Economic Review, Elsevier, vol. 43(1), pages 29-45, January.
- Blonigen, Bruce A. & Ohno, Yuka, 1998. "Endogenous protection, foreign direct investment and protection-building trade," Journal of International Economics, Elsevier, vol. 46(2), pages 205-227, December.
- Jan Haaland & Ian Wooton, 1998.
"Antidumping jumping: Reciprocal antidumping and industrial location,"
Review of World Economics (Weltwirtschaftliches Archiv),
Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 134(2), pages 340-362, June.
- Haaland, Jan I. & Wooton, Ian, 1996. "Anti-dumping jumping: Reciprocal anti-dumping and industrial location," Discussion Papers, Series II 310, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
- Prusa, Thomas J., 1992. "Why are so many antidumping petitions withdrawn?," Journal of International Economics, Elsevier, vol. 33(1-2), pages 1-20, August.
- Smith, Alasdair, 1987. "Strategic investment, multinational corporations and trade policy," European Economic Review, Elsevier, vol. 31(1-2), pages 89-96.
- Tharakan, P. K. M. & Waelbroeck, J., 1994. "Antidumping and countervailing duty decisions in the E.C. and in the U.S.: An experiment in comparative political economy," European Economic Review, Elsevier, vol. 38(1), pages 171-193, January.
- Hillman, Arye L & Ursprung, Heinrich W, 1988. "Domestic Politics, Foreign Interests, and International Trade Policy," American Economic Review, American Economic Association, vol. 78(4), pages 719-45, September.
- Horstmann, Ignatius J & Markusen, James R, 1987. "Strategic Investments and the Development of Multinationals," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(1), pages 109-21, February.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:2320. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.