Elasticity of substitution and anti-dumping decisions

Motivated by a monopolistic competition model with market segmentation and international price discrimination, this paper analyzes whether there is an inverse relation between the elasticity of substitution and final ad valorem anti-dumping duties across products. We test this for 19 countries using data on anti-dumping from the Global Antidumping Database and US data at the 6-digit HS product level for the elasticity of substitution from Broda and Weinstein (Q J Econ 121(2):541–585, <CitationRef CitationID="CR8">2006</CitationRef>). The results in our empirical investigation support a negative relation between the elasticity of substitution and the final ad valorem anti-dumping duties. Copyright Kiel Institute 2014