European Anti-dumping Policy and the Profitability of National and International Collusion

Hylke Vandenbussche and Reinhilde Veugelers

No 1469, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper is the first to study the effect of European antidumping policy on market structure, i.e. the incentives for firms to engage in a domestic or international cartel in a multi-stage setting. The analysis concentrates on how European antidumping policy influences the incentives for firms to collude domestically or internationally. We tackle the question of whether antidumping regulation helps to establish, maintain or rather endanger full cartels as well as cartels restricted to domestic firms only. Our findings suggest that antidumping legislation can both have a pro-competitive or an anti-competitive effect. Which case prevails depends crucially on the welfare objective function used by the European government and also on the cost asymmetry and the degree of product heterogeneity between domestic and foreign firms. In addition to market structure we also discuss welfare effects. We find that antidumping measures are capable of both increasing or decreasing total community welfare depending on the type of measures installed.

Keywords: Anti-dumping Regulation; Market Structure; Rent-shifting; Welfare (search for similar items in EconPapers)
JEL-codes: F13 L13 L41 (search for similar items in EconPapers)
Date: 1996-09
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Citations: View citations in EconPapers (18)

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Related works:
Journal Article: European anti-dumping policy and the profitability of national and international collusion (1999)
Working Paper: European anti-dumping policy and the profitability of national and international collusion (1997)
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