European antidumping policy and firmsÕ strategic choice of quality

Hylke Vandenbussche () and Xavier Yves Wauthy

No 1999016, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

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 antidumping policy that takes the form of price-undertakings offers a powerful protection to domestic Þrms, 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 proÞts accruing to the domestic Þrm decrease whenever the free trade equilibrium is affected. Hence we show that European Antidumping policies may induce ÒperverseÓ leapfrogging

Keywords: Bertrand competition; injury; quality; Welfare; European antidumping policy (search for similar items in EconPapers)
JEL-codes: F13 L13 (search for similar items in EconPapers)
Date: 1999-03-01
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Related works:
Working Paper: European Antidumping Policy and Firms' Strategic Choice of Quality (2000)
Working Paper: European antidumping policy and firms' strategic cholce of quality (1999)
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Persistent link: http://EconPapers.repec.org/RePEc:cor:louvco:1999016

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