DP7916 Innovation, antidumping, and retaliation

Author(s): Kaz Miyagiwa, Huasheng Song, Hylke Vandenbussche
Publication Date: July 2010
Keyword(s): antidumping, intellectual property rights, R&D, reciprocal dumping
JEL(s): F12, F13, L13
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=7916

We develop a North-South model of reciprocal antidumping (AD). We find that AD wars are winnable for the Northern firm if the Southern market is sufficiently small relative to the North?s. The South can avert AD war with the North by expanding the home market size. It may however trigger AD war by improving its R&D capability. The model yields results that are largely consistent with recent empirical findings that (1) AD is concentrated in R&Dintensive industries, (2) AD actions are mostly between industrial and developing countries, and (3) developing countries use AD to retaliate against industrial countries.