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Antidumping Investigations and the Pass-Through of Exchange Rates and Antidumping Duties

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  • Bruce A. Blonigen
  • Stephen E. Haynes

Abstract

We present a model that shows that exchange rate pass-through is likely to be substantially altered when firms face antidumping (AD) duties and that optimal pass-through of AD duties may be up to 200 percent. We examine both pass-through issues using monthly prices across 345 U.S.- imported Canadian iron and steel products from 1989 through 1995, some of which received duties in U.S. AD cases filed in 1992. We find that exchange rate pass-through rise dramatically after products received AD duties, with no such change for closely-related products not subject to final AD duties. This result has important implications for previous studies that have pooled AD and non-AD products. We also find that pass-through of the final AD duties is 160 percent, which is consistent with our model's predictions.

Suggested Citation

  • Bruce A. Blonigen & Stephen E. Haynes, 1999. "Antidumping Investigations and the Pass-Through of Exchange Rates and Antidumping Duties," NBER Working Papers 7378, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:7378
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    References listed on IDEAS

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    1. Thomas J. Prusa, 1997. "The Trade Effects of U.S. Antidumping Actions," NBER Chapters,in: The Effects of U.S. Trade Protection and Promotion Policies, pages 191-214 National Bureau of Economic Research, Inc.
    2. Bruce A. Blonigen & Robert C. Feenstra, 1997. "Protectionist Threats and Foreign Direct Investment," NBER Chapters,in: The Effects of U.S. Trade Protection and Promotion Policies, pages 55-80 National Bureau of Economic Research, Inc.
    3. Robert W. Staiger & Frank A. Wolak, 1994. "Measuring Industry-Specific Protection: Antidumping in the United States," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1994 Micr), pages 51-118.
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    5. Baldwin, Richard, 1988. "Hyteresis in Import Prices: The Beachhead Effect," American Economic Review, American Economic Association, vol. 78(4), pages 773-785, September.
    6. repec:mes:challe:v:30:y:1987:i:4:p:55-56 is not listed on IDEAS
    7. Froot, Kenneth A & Klemperer, Paul D, 1989. "Exchange Rate Pass-Through When Market Share Matters," American Economic Review, American Economic Association, vol. 79(4), pages 637-654, September.
    8. Anderson, James E., 1993. "Domino dumping II: Anti-dumping," Journal of International Economics, Elsevier, vol. 35(1-2), pages 133-150, August.
    9. Rosendorff, B Peter, 1996. "Voluntary Export Restraints, Antidumping Procedure, and Domestic Politics," American Economic Review, American Economic Association, vol. 86(3), pages 544-561, June.
    10. Bruce A. Blonigen & Thomas J. Prusa, 2001. "Antidumping," NBER Working Papers 8398, National Bureau of Economic Research, Inc.
    11. Feinberg, Robert M, 1989. "Exchange Rates and "Unfair Trade."," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 704-707, November.
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    13. Corinne M. Krupp & Patricia S. Pollard, 1996. "Market Responses to Antidumping Laws: Some Evidence from the U.S. Chemical Industry," Canadian Journal of Economics, Canadian Economics Association, vol. 29(1), pages 199-227, February.
    14. Gron, Anne & Swenson, Deborah L, 1996. "Incomplete Exchange-Rate Pass-Through and Imperfect Competition: The Effect of Local Production," American Economic Review, American Economic Association, vol. 86(2), pages 71-76, May.
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    Cited by:

    1. Alexander-Nikolai Sandkamp, 2018. "The Trade Effects of Antidumping Duties: Evidence from the 2004 EU Enlargement," ifo Working Paper Series 261, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    2. Poonam Gupta & Arvind Panagariya, 2006. "Injury Investigations in Antidumping and the Super-Additivity Effect: A Theoretical Explanation," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(1), pages 151-164, April.
    3. Patricia S. Pollard & Cletus C. Coughlin, 2006. "Passthrough Estimates and the Choice of an Exchange Rate Index," Review of International Economics, Wiley Blackwell, vol. 14(4), pages 535-553, September.
    4. Knetter, Michael M. & Prusa, Thomas J., 2003. "Macroeconomic factors and antidumping filings: evidence from four countries," Journal of International Economics, Elsevier, vol. 61(1), pages 1-17, October.
    5. Bruce A. Blonigen & Stephen E. Haynes, 2002. "Antidumping Investigations and the Pass-Through of Antidumping Duties and Exchange Rates," American Economic Review, American Economic Association, vol. 92(4), pages 1044-1061, September.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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