Why Do Firms Pay Antidumping Duty?
December 1, 1999
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Summary
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.
Subject: Antidumping, Duties, Economic sectors, Foreign corporations, Inflation, International trade, Prices, Taxes, Trade liberalization
Keywords: Antidumping, Antidumping duty, cost parameter, dumping margin, Duties, Foreign corporations, foreign firm, Home firm, Inflation, monopoly power, price negotiation, profit function, Trade liberalization, welfare effect, WP
Pages:
24
Volume:
1999
DOI:
Issue:
166
Series:
Working Paper No. 1999/166
Stock No:
WPIEA1661999
ISBN:
9781451858082
ISSN:
1018-5941
