The Effects of an Anti-Dumping Policy on Stock Prices of the Solar Companies

This study focuses on the reactions of abnormal returns on the Taiwanese solar stocks from eight anti-dumping events to examine the effect of anti-dumping tax on the Taiwanese solar companies. We collects the Taiwanese market reactions to U.S. announced anti-dumping tax on Taiwan, and the Chinese market reactions to U.S. announced anti-dumping tax on China. The purposes of this study are to explore whether abnormal returns are negative during the announcement of anti-dumping tax investigation. Furthermore, we test how abnormal returns change when the verdict of anti-dumping tax is favorable or unfavorable. Finally, we test whether Taiwanese solar stocks abnormal returns are positive during American announcement of anti-dumping tax on China. We find that the abnormal returns are negative during the announcement of anti-dumping tax investigation. The abnormal returns are positive if the verdict of anti-dumping tax is favorable. On the other hand, the abnormal returns are negative if the verdict of anti-dumping tax is unfavorable. Because China and Taiwan ranks top one and two in solar investment respectively, we find positive abnormal returns of Taiwanese companies during American?s announcement of anti-dumping tax on China.