Firm's Responsive Behaviors in WTO Trade Disputes: Countervailing Cases on Korean DRAMs

Journal of World Trade, Vol. 51: No. 4, 2017

37 Pages Posted: 29 Mar 2017

See all articles by Wonkyu Shin

Wonkyu Shin

Institute of Economics and Business, Ilias State University (ISU); Center for International Development Cooperation, Kyung Hee University

Dukgeun Ahn

Seoul National University

Date Written: March 29, 2017

Abstract

How do decisions of the World Trade Organization (WTO) Dispute Settlement Body (DSB) relate to economic/trade gains? This is an important question to consider when evaluating the efficacy of the WTO DSB. Although it may seem obvious that a successful dispute resolution through the DSB would remove trade barriers and increase trade, the ruling effects are not so straightforward, with recent empirical studies suggesting an unclear causality between the dispute resolutions and subsequent changes in trade. Using product and firm-level data, this paper examines three WTO disputes over countervailing duties on Korean Dynamic Random Access Memory chips, which have raised similar legal issues but yielded different outcomes. By investigating the dynamics of firm behavior over the course of disputes, our analysis sheds light on the difficulties of detecting changes in trade flows following rulings by the DSB. We conclude that cross-border trade flows are substantially affected by firm-and-market specific adjustments interacting with the current world trade environment, such as flexible reallocation of resources and promotion of a production network.

Keywords: WTO dispute, Countervailing Duties, DRAMs, Hynix, FDI

JEL Classification: F13, F14, K33

Suggested Citation

Shin, Wonkyu and Ahn, Dukgeun, Firm's Responsive Behaviors in WTO Trade Disputes: Countervailing Cases on Korean DRAMs (March 29, 2017). Journal of World Trade, Vol. 51: No. 4, 2017, Available at SSRN: https://ssrn.com/abstract=2942609

Wonkyu Shin (Contact Author)

Institute of Economics and Business, Ilias State University (ISU) ( email )

Kakutsa Cholokashvili Ave 3/5
Tbilisi, 0162
Georgia

HOME PAGE: http://beri.iliauni.edu.ge/researchers/

Center for International Development Cooperation, Kyung Hee University ( email )

Dongdaemun-ku
Seoul, Gyeonggi-Do 446-701
Korea, Republic of (South Korea)
82-2-961-9193 (Phone)
82-2967-6931 (Fax)

Dukgeun Ahn

Seoul National University ( email )

Graduate School of International Studies
Sillim, Kwanak-gu
Seoul, 151-742
82-2-880-9249 (Phone)

HOME PAGE: http://gsis.snu.ac.kr

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