European Anti-Dumping Policy and the Profitability of National and International Collusion

36 Pages Posted: 6 Nov 1996

See all articles by Reinhilde Veugelers

Reinhilde Veugelers

Catholic University of Leuven (KUL) - Department of Applied Economics; Centre for Economic Policy Research (CEPR)

Hylke Vandenbussche

Catholic University of Leuven (KUL), CEPR

Date Written: September 1996

Abstract

This paper is the first to study the effect of European Anti-dumping policy on market structure, i.e., the incentives of firms to engage in a domestic or international cartel in a multi-stage setting. The analysis concentrates on how European anti-dumping policy influences the incentives for firms to collude domestically or internationally. We tackle the question of whether anti-dumping regulation helps to establish, maintain or endanger full international cartels as well as cartels restricted to domestic firms only. Our findings suggest that European anti-dumping legislation can have both a pro-competitive and an anti-competitive effect. Which effect prevails depends crucially on the welfare objective function used by the European government and also on the cost-asymmetry and the degree of product heterogeneity between domestic and foreign firms. In addition to market structure, we also discuss welfare effects. We find that anti-dumping measures are capable of both increasing and decreasing total European Community welfare, depending on the type of measures installed.

JEL Classification: F13, L13, L41

Suggested Citation

Veugelers, Reinhilde and Vandenbussche, Hylke, European Anti-Dumping Policy and the Profitability of National and International Collusion (September 1996). Available at SSRN: https://ssrn.com/abstract=405 or http://dx.doi.org/10.2139/ssrn.405

Reinhilde Veugelers

Catholic University of Leuven (KUL) - Department of Applied Economics ( email )

Leuven, B-3000
Belgium
+32 16 32 6908 (Phone)
+32 16 32 6732 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Hylke Vandenbussche (Contact Author)

Catholic University of Leuven (KUL), CEPR ( email )

Faculty of Economics
Naamsestraat 69
B-3000 Leuven, 3000
Belgium
+32 16 326 920 (Phone)
+32 16 326 732 (Fax)

HOME PAGE: https://www.sites.google.com/site/vandenbusschehylke/home-1

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