Title: Strategic behaviour under European anti-dumping rules
Authors: Vandenbussche, Hylke
Pauwels, W
Weverbergh, M
Issue Date: 1997
Publisher: Centre for Economic Policy Research
Series Title: CEPR Discussion Paper 1565 (Feb.) pages:1-40
Abstract: This paper analyzes how European anti-dumping policy under imperfect competition affects firm behavior and domestic welfare. Our theoretical model is the first to complement the European empirical literature on anti-dumping policy (see Messerlin (1989), Hindley (1988), Tharakan and Waelbroeck (1994)), and can usefully be compared with recent papers dealing with the effects of U.S. anti-dumping policy (Reitzes (1993), Fischer (1992), Prusa (1994)). We use a two-period Cournot duopoly model with a European and a foreign firm that differ in costs and products. European anti-dumping policy differs from its U.S. counterpart mainly in terms of injury margin calculation and the derivation of the anti-dumping duty. European anti-dumping rules provide the home firm with incentives to either induce or to feign injury. Our results indicate that when the level of protection is endogenous, the strategic trade policy argument for protection need not apply. Our findings also suggest that U.S. anti-dumping rules perform better than European rules in terms of welfare and in terms of protecting domestic value added and employment
Publication status: published
KU Leuven publication type: IR
Appears in Collections:LICOS - Centre for Institutions and Economic Performance, Leuven

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