Dumping in a Global World

Jose Moraga-Gonzalez and Jean-Marie Viaene ()
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Jean-Marie Viaene: Faculty of Economics, Erasmus Universiteit Rotterdam

No 04-128/2, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Anti-dumping actions are now the trade policy of choice of developing and transition economies. To understand why these economies have increasingly applied anti-dumping laws, we build a simple theoretical model of vertical intra-industry trade and investigate the strategic incentives of exporting firms to undertake dumping. We show that the definition of dumping matters. Based on a comparison of low-quality and high-quality prices, only unilateral dumping by the low-quality firm obtains. By contrast, the standard WTO definition leads to either reciprocal or unilateral dumping by the high-quality firm, depending on cross-country differences in incomes, the height of tariff protection and on exchange rate changes.

See publication in The World Economy , 2005, 28(5), 669-682.

Keywords: Dumping; Exchange Rate; Injury; Product Quality; Tariffs (search for similar items in EconPapers)
JEL-codes: F12 F13 P31 (search for similar items in EconPapers)
Date: 2004-11-24
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20040128

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