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Does Anti-dumping Enforcement Generate Threat?

Author

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  • Bagchi, Sagnik
  • Bhattacharyya, Surajit
  • Narayanan, Krishnan

Abstract

The last two decades have witnessed that countries across the world are guided by the rules and regulations of multilateral trading institutions (for example, World Trade organization [WTO], International Monetary Fund [IMF]) in order to promote free and fair trade through gradual reduction in trade barriers. The World economy has noticed significant reduction in tariffs, yet we find a rise in non-tariff barriers (NTBs). However, we still find dumping and few other trade strategies of the exporting countries as a major hindrance to free and fair trade. Such behaviour has led to “contingent protection” as a tool of new-protectionism. Among the contingent protection measures, anti-dumping (AD) has evolved as the most popular choice of strategy for the trading nations. The AD policy invokes a threat to the exporter and thereby can change its strategic behaviour. We describe the phenomenon of dumping through a price-leadership model and thereby compute the optimal level of anti-dumping duty that can offset dumping. Using a sequential game, we conclude that the credible threat of an AD duty restricts dumping and thereby leads to a win-win situation for both the foreign and domestic firms.

Suggested Citation

  • Bagchi, Sagnik & Bhattacharyya, Surajit & Narayanan, Krishnan, 2014. "Does Anti-dumping Enforcement Generate Threat?," MPRA Paper 53627, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:53627
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    References listed on IDEAS

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    1. Thusnelda Tivig & Uwe Walz, 2000. "Market share, cost‐based dumping, and anti‐dumping policy," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 33(1), pages 69-86, February.
    2. Doreen Bekker, 2006. "The Strategic Use Of Anti‐Dumping In International Trade," South African Journal of Economics, Economic Society of South Africa, vol. 74(3), pages 501-521, September.
    3. Thomas J. Prusa, 2021. "On the spread and impact of anti-dumping," World Scientific Book Chapters, in: Thomas J Prusa (ed.), Economic Effects of Antidumping, chapter 4, pages 45-65, World Scientific Publishing Co. Pte. Ltd..
    4. 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 745-763, November.
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    1. Sagnik Bagchi & Surajit Bhattacharyya & K. Narayanan, 2015. "Anti-dumping Initiations in Indian Manufacturing Industries," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 16(2), pages 278-294, September.
    2. Neha B. Upadhayay, 2020. "Are only men fighting trade wars? Empirical evidence from the Temporary Trade Barriers (TTB) data," Erudite Working Paper 2020-03, Erudite.
    3. Neha Bhardwaj Upadhayay, 2020. "Uncovering the proliferation of contingent protection through channels of retaliation, gender and development assistance," Erudite Ph.D Dissertations, Erudite, number ph20-02 edited by Julie Lochard & Catherine Bros, April.
    4. Omphemetse S. Sibanda Sr, 2020. "Procedural Requirements of the South African Anti-Dumping Law and Practice Prior to Imposition of Anti-Dumping Duties: Are They Really WTO-inconsistent?," Foreign Trade Review, , vol. 55(2), pages 216-238, May.

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    More about this item

    Keywords

    Price-leadership; Dumping; Anti-dumping duty; Sequential game;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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