Why Do Firms Pay Antidumping Duty?

Poonam Gupta

No 1999/166, IMF Working Papers from International Monetary Fund

Abstract: With the virtual elimination of tariffs and quotas under GATT, antidumping measures emerged as a key instrument of protection. Under antidumping actions exporters can either raise the price to eliminate the dumping margin or pay an antidumping duty. This paper analyzes the incentives to exporters to choose between duty or settlement outcomes and finds that due to the smaller loss in market share exporters may prefer an antidumping duty over voluntary settlement. The paper analyzes the welfare implications of these outcomes and finds that they are ambiguous.

Keywords: WP; Antidumping duty; price negotiation; foreign firm; dumping margin; Home firm; monopoly power; welfare effect; cost parameter; profit function; Foreign corporations; Antidumping; Duties; Trade liberalization; Inflation (search for similar items in EconPapers)
Pages: 24
Date: 1999-12-01
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Citations: View citations in EconPapers (4)

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