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Why Do Firms Pay Antidumping Duty?

Author

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  • Poonam Gupta

Abstract

With the virtual elimination of tariffs and quotas under GATT, antidumping measures emerged as a key instrument of protection. Under antidumping actions exporters can either raise the price to eliminate the dumping margin or pay an antidumping duty. This paper analyzes the incentives to exporters to choose between duty or settlement outcomes and finds that due to the smaller loss in market share exporters may prefer an antidumping duty over voluntary settlement. The paper analyzes the welfare implications of these outcomes and finds that they are ambiguous.

Suggested Citation

  • Poonam Gupta, 1999. "Why Do Firms Pay Antidumping Duty?," IMF Working Papers 99/166, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:99/166
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    Cited by:

    1. Nelson, Douglas, 2006. "The political economy of antidumping: A survey," European Journal of Political Economy, Elsevier, vol. 22(3), pages 554-590, September.
    2. Miyagiwa, Kaz & Song, Huasheng & Vandenbussche, Hylke, 2016. "Size matters! Who is bashing whom in trade war?," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 33-45.
    3. Bruce A. Blonigen & Thomas J. Prusa, 2001. "Antidumping," NBER Working Papers 8398, National Bureau of Economic Research, Inc.
    4. Falvey, Rod & Wittayarungruangsri, Sarut, 2006. "Market size and antidumping in duopolistic competition," European Journal of Political Economy, Elsevier, vol. 22(3), pages 771-786, September.

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