Dumping Allegations as a (Less)
Free Trade Tool
Michael R. Czinkota
Georgetown University
Masaaki Kotabe
Temple University
Preet S. Aulakh
Temple University
March 23, 2002
U.S. Antidumping Orders in Effect
as of Dec. 1, 2001
Category
# Cases % of Total
Steel
114
47.7%
Industrial Machinery and Equipment
48
20.1%
Chemicals
37
15.5%
Food/Agriculture
21
8.8%
Consumer Goods
9
3.8%
Textiles
8
3.3%
Other
2
0.8%
TOTAL
239
100.0%
Based on: http://ia.ita.doc.gov/stats/inefecta.html
U.S. Antidumping Orders in Effect as of Dec. 1,
2001
Number of Cases
150
127
100
61
27
50
18
0
Asia
Europe
Regions
Based on: http://ia.ita.doc.gov/stats/inefecta.html
Latin
America
Transition
Countries
Based
1999
1996
1993
1990
1987
1984
1981
1978
1975
1972
1969
100
80
60
40
20
0
1966
No. of Cases
Antidumping Cases Conducted Against the U.S.
1966 to 2000 Number of Cases
Total Global Antidumping Actions Taken
Annually
450
400
350
Total Global
Cases
300
Total
Cases
250
Cases
Against the
U.S.
Cases
Initiated by
the U.S.
200
150
100
50
0
1996
1997
1998
1999
2000
2001
Year
Based on: www.wto.org and http://ia.ita.doc.gov/stats
Total Global Antidumping Actions Taken
Annually by Category
2001
2000
1999
1998
1997
1996
106
114
35
51
41
47
STEEL
90
91
52
65
17
25
FOOD/AGRICULTURE
46
34
21
26
16
18
TEXTILES
30
39
21
17
22
23
INDUSTRIAL
EQUIPMENT/MACHINERY 55
89
47
56
51
53
CONSUMER GOODS
26
29
18
31
29
30
OTHER
47
30
4
11
9
13
400
426
198
257
185
209
CHEMICALS
TOTAL
Based on: www.wto.org
Research Questions
A. ITC Filings and Decisions: Strategic Actions or
B.
C.
D.
E.
F.
Salvage Operations?
ITC Beneficiaries: Corporate Bullies or
Competitive Underdogs?
Does the Type of Filing Influence the ITC
Outcome?
Does the Country of Origin of Competition
Matter?
Does the Pre-Petition Process Affect Trade
Flows?
Does the ITC Decision in Favor of the Filing
Companies Positively Affect their Post-Decision
Stock Prices?
Research Questions
A. ITC Filings and Decisions: Strategic
Actions or Salvage Operations?
H1. Dumping cases will be filed with the ITC not only
by industries with declining markets but also by
industries with stable or growing markets.
H2. The ITC is more likely to issue positive findings of
injury, the higher the import penetration ratio is.
H3. The ITC is more likely to issue positive findings of
injury, the faster the import growth rate is.
B. ITC Beneficiaries: Corporate Bullies
or Competitive Underdogs?
H4a. The ITC is more likely to issue positive
findings of injury for industries which are
dominated by a few firms, irrespective of market
growth rate.
H4b. The ITC is more likely to issue positive
findings of injury for atomistic industries if their
markets are declining.
C. Does the Type of Filing Influence the
ITC Outcome?
H5. Fillings by large numbers of firms are more
likely to result in positive ITC decisions.
H6. The higher the current import tariff rates, the
less likely the ITC is to make positive
antidumping decisions.
H7. Consumer goods filings are more likely than
industrial product filings to receive positive ITC
decisions.
D. Does the Country of Origin of
Competition Matter?
H8. The ITC is more likely to issue positive
findings of injury for industries where
Japan and/or Asian Tigers are accused of
dumping than otherwise.
E. Does the Pre-Petition Process Affect
Trade Flows?
H9. A longer pre-petition process is likely to
result in negative ITC decisions.
F. Does the ITC Decision in Favor of
the Filing Companies Positively
Affect their Post-Decision Stock
Prices?
Table 4
Regression Model for
% Change in Stock Price on ITC Decision
Estimate
Standard
Error
t-value
p-value
-2.23
1.51
-1.47
.14
.002
.003
.66
.51
% Stock Price Change on
Filing Date
- .27
.08
-3.26
.001
ITC Decision (1 = in favor;
0 = against)
3.45
1.39
2.48
.02
Variable
Intercept
Decision File Date
R 2 = 10.8%
F (df = 3, 124) = 4.88
p-value = .003
Conclusions and Implications

Political Strategies

Public action and private benefits
Collective action and free riding
potential of firms
 Market signaling


Post-filing versus post-decision market
reaction