Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/86308 
Year of Publication: 
2004
Series/Report no.: 
Tinbergen Institute Discussion Paper No. 04-128/2
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
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.
Subjects: 
Dumping
Exchange Rate
Injury
Product Quality
Tariffs
JEL: 
F12
F13
P31
Document Type: 
Working Paper

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