Anti-dumping actions and macroeconomic fluctuations

Using a significantly larger panel of countries than previous studies, we find strong confirmation that macroeconomic factors (real GDP growth and changes in the real effective exchange rate) affect the frequency of anti-dumping investigations. A reduction in real GDP growth or a depreciation of the real effective exchange rate leads to increased use of anti-dumping. Most previous studies of “traditional users” and “new users” of anti-dumping tend to associate real exchange rate appreciation with more anti-dumping activities. Because of the possible endogeneity of trade liberalization and anti-dumping actions, we caution against the inclusion of contemporaneous measures of trade openness in the explanatory variables. Even if this advice is ignored, no convincing evidence exists that greater trade openness or reductions in most favored nation (MFN) tariffs by developing countries increase the number of their anti-dumping filings. An important caveat to our results is the large number of zero anti-dumping actions in the data set, which may not have been adequately controlled for in the regressions.