The trade effects of anti-dumping duties: Firm-level evidence from China

Abstract

This paper uses Chinese customs data to investigate the trade effects of anti-dumping (AD) policies. Merging firm-level exports to firm-specific AD duties, we exploit differences across firms within products. This reduces endogeneity concerns which have plagued earlier research. Based on a firm-level gravity model, we find that, in line with literature, AD duties reduce exports, induce firm exit but do not affect producer prices. However, our strategy yields substantially larger estimates which differ strongly across sectors. More interestingly, imports to the EU react differently compared to those to the US; a finding with obvious implications for the design of AD policies. Smaller exporters are more heavily affected than larger ones, suggesting important within-industry reallocation effects. Moreover, we find evidence for trade deflection as AD duties lead to market entry of Chinese firms into third countries.

The trade effects of antidumping duties: Evidence from the 2004 EU enlargement

“…The small negative effect could constitute such a spillover effect. Felbermayr et al (2018) show that the effect of AD duties may vary by imposing country. This raises the question of external validity, more precisely whether the results can be transferred to EU15 countries or whether they are specific to EU accession states.…”

“…import prices are low. Felbermayr et al (2018) show explicitly that not accounting for demand side effects that are correlated with the decision to implement AD duties results in an underestimation of the true treatment effect. 29 Since the initial panel only consists of two time periods, the time dimension disappears after taking first differences.…”

“…inefficient exporters driven out of the market, leaving only efficients ones behind. See for example Lu et al (2013), Jabbour et al (2016) and Felbermayr et al (2018) for a more detailed discussion). 49 100 * (e δ − 1)%…”

“…Jabbour et al (2016) show that Chinese exporters reduce exports to the EU following the imposition of EU AD duties, but also become larger and more productive. Felbermayr et al (2018) look at the universe of Chinese firm level exports, showing that both EU and US AD duties decrease firm exports and induce exit, with small firms being affected most severely. Overall Chinese export values of targeted products to the US (EU) fall by 62% (41%) following the imposition of AD duties.…”

“…Overall Chinese export values of targeted products to the US (EU) fall by 62% (41%) following the imposition of AD duties. 15 Felbermayr et al (2018) tackle this problem by combining firm level data with an extensive fixed effects estimation strategy, as time varying product characteristics can be controlled for, so that the treatment effect is identified using variation in duties within products across firms. However, this methodology requires firm level data which is not available for all countries exporting to the EU.…”