Causes of Anti-dumping Actions: Macroeconomics or Retaliation?

Anti-dumping (AD) investigations are widespread. China and the U.S. are two big users and targets of AD investigations. They, respectively, represent developing and developed countries on one hand, and new AD user and traditional AD user on the other hand. In this paper, using AD filing data from these two countries from 1991 to 2005, we examine how AD filings in China and the U.S., respectively, are affected by macroeconomic conditions, retaliatory motives and other factors. This is achieved by using negative binomial models and maximum likelihood techniques. First, we show that the slowdown of GDP growth, appreciation of domestic currency and increase in import penetration significantly increase a country’s AD filings. Second, it is also found a country uses AD filings against other countries which use similar measures on this country’s exports. Third, we identify and test a number of control variables, including geographical distance, time trend and contagion. Fourth, we compare China and the U.S. and find that they have similar AD filing behavior in response to changes in macroeconomic conditions, but they are not similar in the use of AD filings as a retaliatory tool, and they are very different with regard to the relationship between AD filings and other control factors.