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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/18728| Title: | Anti-dumping, intra-industry trade and quality reversals |
| Keywords: | F13 F12 ddc:330 anti-dumping duty intra-industry trade price undertaking product quality quality reversals Antidumping Intraindustrieller Handel Spieltheorie Produktqualität Theorie |
| Issue Date: | 16-Oct-2013 |
| Publisher: | |
| Description: | We examine an export game where two firms (home and foreign), located in two different countries, produce vertically differentiated products. The foreign firm is the most efficient in terms of R&D costs of quality development and the foreign country is relatively larger and endowed with a relatively higher income. The unique (risk-dominant) Nash equilibrium involves intra-industry trade where the foreign producer manufactures a good of higher quality than the domestic firm. This equilibrium is characterized by unilateral dumping by the foreign firm into the domestic economy. Two instruments of anti-dumping (AD) policy are examined, namely, a price undertaking (PU) and an anti-dumping duty. We show that, when firms? cost asymmetries are low and countries differ substantially in size, a PU leads to a quality reversal in the international market, which gives a rationale for the domestic government to enact AD law. We also establish an equivalence result between the effects of an AD duty and a PU. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/18728 |
| Other Identifiers: | http://hdl.handle.net/10419/18728 ppn:477511473 |
| Appears in Collections: | EconStor |
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