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Anti-dumping, intra-industry trade and quality reversals

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dc.creator Moraga-González, José Luis
dc.creator Viaene, Jean-Marie
dc.date 2004
dc.date.accessioned 2013-10-16T07:01:01Z
dc.date.available 2013-10-16T07:01:01Z
dc.date.issued 2013-10-16
dc.identifier http://hdl.handle.net/10419/18728
dc.identifier ppn:477511473
dc.identifier.uri http://koha.mediu.edu.my:8181/xmlui/handle/10419/18728
dc.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.
dc.language eng
dc.publisher
dc.relation CESifo working papers 1365
dc.rights http://www.econstor.eu/dspace/Nutzungsbedingungen
dc.subject F13
dc.subject F12
dc.subject ddc:330
dc.subject anti-dumping duty
dc.subject intra-industry trade
dc.subject price undertaking
dc.subject product quality
dc.subject quality reversals
dc.subject Antidumping
dc.subject Intraindustrieller Handel
dc.subject Spieltheorie
dc.subject Produktqualität
dc.subject Theorie
dc.title Anti-dumping, intra-industry trade and quality reversals
dc.type doc-type:workingPaper


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