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Is price undertaking a more friendly protection policy than an anti‐dumping duty?

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  • Cheng‐Hau Peng
  • Hong Hwang
  • Kuo‐Feng Kao

Abstract

It is generally believed that price undertaking is a more amicable protection policy for a foreign dumping firm than an anti‐dumping (AD) duty as the former allows the foreign dumping firm to keep the duty rents. However, this result contradicts the empirical finding in, who shows that only 41% of anti‐dumping measures in EEC end up with price undertaking in 1981–2001, even though firms can commit to a minimum price instead of being imposed with an anti‐dumping duty. From the perspective of the dumping firm, this paper shows that whether the price‐undertaking police is more or less amicable than the AD duty is contingent upon the competition modes of the firms in the industry.

Suggested Citation

  • Cheng‐Hau Peng & Hong Hwang & Kuo‐Feng Kao, 2023. "Is price undertaking a more friendly protection policy than an anti‐dumping duty?," The World Economy, Wiley Blackwell, vol. 46(1), pages 120-134, January.
    • Handle: RePEc:bla:worlde:v:46:y:2023:i:1:p:120-134
    DOI: 10.1111/twec.13309
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    References listed on IDEAS

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    1. Maurizio Zanardi, 2004. "Antidumping law as a collusive device," Canadian Journal of Economics, Canadian Economics Association, vol. 37(1), pages 95-122, February.
    2. Jota Ishikawa & Kaz Miyagiwa, 2008. "Price undertakings, VERs, and foreign direct investment: the case of foreign rivalry," Canadian Journal of Economics, Canadian Economics Association, vol. 41(3), pages 954-970, August.
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