Template-Type: ReDIF-Paper 1.0 Series: Tinbergen Institute Discussion Papers Creation-Date: 2004-11-24 Number: 04-128/2 Author-Name: Jose Luis Moraga-Gonzalez Author-Email: firstname.lastname@example.org Author-Workplace-Name: Groningen University Author-Name: Jean-Marie Viaene Author-Email: email@example.com Author-Workplace-Name: Faculty of Economics, Erasmus Universiteit Rotterdam Title: Dumping in a Global World Abstract: Anti-dumping actions are now the trade policy of choice of developing and transition economies. To understand why these economies have increasingly applied anti-dumping laws, we build a simple theoretical model of vertical intra-industry trade and investigate the strategic incentives of exporting firms to undertake dumping. We show that the definition of dumping matters. Based on a comparison of low-quality and high-quality prices, only unilateral dumping by the low-quality firm obtains. By contrast, the standard WTO definition leads to either reciprocal or unilateral dumping by the high-quality firm, depending on cross-country differences in incomes, the height of tariff protection and on exchange rate changes.
See publication in The World Economy, 2005, 28(5), 669-682. Classification-JEL: F12; F13; P31 Keywords: Dumping; Exchange Rate; Injury; Product Quality; Tariffs File-Url: http://papers.tinbergen.nl/04128.pdf File-Format: application/pdf File-Size: 677380 bytes Handle: RePEc:tin:wpaper:20040128