Title: European antidumping policy and firms' strategic choice of quality
Authors: Vandenbussche, Hylke
Wauthy, X
Issue Date: 2000
Publisher: Centre for Economic Policy Research
Series Title: CEPR Discussion Paper 2624 (Nov.)
Abstract: In this paper, we consider a European industry characterized by vertical product differentiation. Using a two-stage model with quality choice made before price competition takes place, we show that EU anti-dumping policy that takes the form of price-undertakings offers a powerful protection to domestic firms, but only at the price competition stage. Once the impact of the A-D policy on quality choices is taken into account, European Welfare as well as profits accruing to the domestic firm decrease whenever the free trade equilibrium is affected. Hence we show that European Antidumping policies may induce 'perverse' leapfrogging.
Publication status: published
KU Leuven publication type: IR
Appears in Collections:LICOS - Centre for Institutions and Economic Performance, Leuven

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