DP1272 | Reciprocal Anti-Dumping and the Location of Firms

Publication Date

30/11/1995

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Abstract

Anti-dumping policies are often justified as legitimate actions by governments in their efforts to protect domestic producers from unfair foreign competition. We investigate the impact of anti-dumping rules on firms' production decisions as to how much and where to produce. Anti-dumping measures may have unforeseen effects if they induce direct foreign investment and consequently increase domestic competition. We therefore focus on locational choice and consider the strategies of national governments attempting to advance the interests of their citizens through anti-dumping legislation. Our analysis also has implications for the effects of market integration policies, such as Europe 1992.