Self-Protection: Antidumping Duties, Collusion and FDI

Datum

2003-11

Zeitschriftentitel

ISSN der Zeitschrift

Bandtitel

Verlag

University of Oregon, Dept. of Economics

Zusammenfassung

It is well established that the threat of antidumping duties can help sustain collusion between a foreign firm and its domestic counterpart. However, when the foreign firm is a multinational, its subsidiary will fight against a new duty, potentially making this threat hollow and collusion less likely. We show that the multinational may therefore choose to submit to a tariff even under collusion since evidence indicates that duties are more difficult to remove than initiate. In this way, it is possible to obtain a greater degree of commitment, although it comes at a cost. Nevertheless, we show that this can be a more profitable strategy than those previously explored. In fact, we find several cases where subsidiaries of multinational firms have indeed filed for protection from their own parents.

Beschreibung

21 p.

Schlagwörter

Antidumping, Collusion, Foreign direct investment

Zitierform