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The Anatomy of Trade Deflection

  • Veysel Avsar

    ()

    (Department of Economics, Florida International University)

This study employs a rich four dimensional export data of Brazilian firms to empirically examine the effect of past exporting relationships of the firms, whose products are targeted by antidumping duties, on their export flows to alternative markets. We show that, on the intensive margin, firms increase their export volumes to different countries that they were already exporting the targeted product when they suffer an AD duty in a particular country. On the extensive margin, our findings suggest that firms¡¯ probability of exporting in an export market resulting from an AD duty in a different market increases only if they have already an established trading relationship either for the targeted or a different product. In addition to making sense of existing puzzles in trade deflection, this paper makes an important contribution by demonstrating how much the fixed costs of developing an export destination matter in terms of trade deflection.

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Paper provided by Florida International University, Department of Economics in its series Working Papers with number 1004.

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Length: 24 pages
Date of creation: Sep 2010
Date of revision:
Handle: RePEc:fiu:wpaper:1004
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Phone: (305) 348-2316
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Web page: http://casgroup.fiu.edu/Economics/

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  1. KONINGS, Jozef & VANDENBUSSCHE, Hylke, 2009. "Antidumping protection hurts exporters : firm-level evidence from France," CORE Discussion Papers 2009042, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Konings, Jozef & Springael, Linda & Vandenbussche, Hylke, 2001. "Import Diversion under European Antidumping Policy," CEPR Discussion Papers 2785, C.E.P.R. Discussion Papers.
  3. Buono, Ines & Lalanne, Guy, 2012. "The effect of the Uruguay round on the intensive and extensive margins of trade," Journal of International Economics, Elsevier, vol. 86(2), pages 269-283.
  4. Bown, Chad P. & Crowley, Meredith A., 2007. "Trade deflection and trade depression," Journal of International Economics, Elsevier, vol. 72(1), pages 176-201, May.
  5. Kyle Bagwell & Robert W. Staiger, 1993. "Multilateral Tariff Cooperation During the Formation of Free Trade Areas," Discussion Papers 1048, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  6. Robert W. Staiger & Kyle Bagwell, 1999. "An Economic Theory of GATT," American Economic Review, American Economic Association, vol. 89(1), pages 215-248, March.
  7. Robert M. Feinberg & Kara M. Olson, 2004. "The Spread of Antidumping Regimes and the Role of Retaliation in Filings," International Trade 0411003, EconWPA.
  8. Konings, Jozef & Vandenbussche, Hylke, 2008. "Heterogeneous Responses of Firms to Trade Protection," CEPR Discussion Papers 6724, C.E.P.R. Discussion Papers.
  9. Bagwell, Kyle & Staiger, Robert W., 2004. "Multilateral trade negotiations, bilateral opportunism and the rules of GATT/WTO," Journal of International Economics, Elsevier, vol. 63(1), pages 1-29, May.
  10. Robert M. Feinberg & Kara M. Reynolds, 2007. "Tariff Liberalisation and Increased Administrative Protection: Is There a Quid Pro Quo?," The World Economy, Wiley Blackwell, vol. 30(6), pages 948-961, 06.
  11. Oana Hirakawa & Marc-Andreas Muendler & James E. Rauch, 2010. "Employee spinoffs and other entrants: stylized facts from Brazil," LSE Research Online Documents on Economics 36384, London School of Economics and Political Science, LSE Library.
  12. Sofronis Clerides & Saul Lach & James Tybout, 1996. "Is "Learning-by-Exporting" Important? Micro-Dynamic Evidence from Colombia, Mexico and Morocco," NBER Working Papers 5715, National Bureau of Economic Research, Inc.
  13. Danielken Molina & Marc-Andreas Muendler, 2013. "Preparing to Export," NBER Working Papers 18962, National Bureau of Economic Research, Inc.
  14. Michael Owen Moore & Maurizio Zanardi, 2008. "Trade Liberalization and Antidumping: Is There a Substitution Effect?," Working Papers 2008-09, The George Washington University, Institute for International Economic Policy.
  15. Roberto Alvarez & Ricardo López, 2005. "Exporting and performance: evidence from Chilean plants," Canadian Journal of Economics, Canadian Economics Association, vol. 38(4), pages 1384-1400, November.
  16. Pierce, Justin R., 2011. "Plant-level responses to antidumping duties: Evidence from U.S. manufacturers," Journal of International Economics, Elsevier, vol. 85(2), pages 222-233.
  17. Roberto Álvarez & Hasan Faruq & Ricardo A. López, 2010. "Is Previous Exporting Experience Relevant for New Exports?," Working Papers Central Bank of Chile 599, Central Bank of Chile.
  18. Bodhisattva Ganguli, 2008. "The Trade Effects of Indian Antidumping Actions," Review of International Economics, Wiley Blackwell, vol. 16(5), pages 930-941, November.
  19. 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, vol. 133(3), pages 419-457, September.
  20. Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 47-82, January.
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