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Does Anti-dumping Enforcement Generate Threat?

Sagnik Bagchi (), Surajit Bhattacharyya and Krishnan Narayanan ()

Foreign Trade Review, 2014, vol. 49, issue 1, 31-44

Abstract: The last two decades have witnessed that countries across the world are guided by the rules and regulations of multilateral trading institutions (for example, World Trade Organization [WTO], International Monetary Fund [IMF]) in order to promote free and fair trade through gradual reduction in trade barriers. The world economy has noticed significant reduction in tariffs, yet we find a rise in non-tariff barriers (NTBs). However, we still find dumping and few other trade strategies of the exporting countries as a major hindrance to free and fair trade. Such behaviour has led to ‘contingent protection’ as a tool of new-protectionism . Among the contingent protection measures, anti-dumping (AD) has evolved as the most popular choice of strategy for the trading nations. The AD policy invokes a threat to the exporter and thereby can change its strategic behaviour. We describe the phenomenon of dumping through a price-leadership model and thereby compute the optimal level of AD duty that can offset dumping. Using a sequential game, we conclude that the credible threat of an AD duty restricts dumping and thereby leads to a win-win situation for both the foreign and domestic firms.

Keywords: Price–leadership; dumping; anti-dumping duty; sequential game (search for similar items in EconPapers)
JEL-codes: C02 C72 D43 F13 L40 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:fortra:v:49:y:2014:i:1:p:31-44

DOI: 10.1177/0015732513515988

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