THESIS
2020
ix, 59 pages : illustrations ; 30 cm
Abstract
Negative shock faced by some imported inputs may affect firms’ sourcing network and
probably deter firm-level performance in the end. In this paper, we use anti-dumping
(AD) investigations as the source of negative shock and study the short-run response
of domestic importers. Specifically, using detailed firm-product-country-level data from
China, we examine the effect of China’s AD investigations on both targeted and non-targeted
imports and propagation effect on performance of Chinese importers. Our empirical
results reveal that on the extensive margin, once subject to AD shock, firms are
more likely to explore new origins and also more likely to cut off exiting origins later for
targeted imports while they become conservative about entry and exit decision of non-targeted
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Negative shock faced by some imported inputs may affect firms’ sourcing network and
probably deter firm-level performance in the end. In this paper, we use anti-dumping
(AD) investigations as the source of negative shock and study the short-run response
of domestic importers. Specifically, using detailed firm-product-country-level data from
China, we examine the effect of China’s AD investigations on both targeted and non-targeted
imports and propagation effect on performance of Chinese importers. Our empirical
results reveal that on the extensive margin, once subject to AD shock, firms are
more likely to explore new origins and also more likely to cut off exiting origins later for
targeted imports while they become conservative about entry and exit decision of non-targeted
imports. On the intensive margin, AD shock leads to trade diversion effect for
targeted imports and trade depressing effect for non-targeted imports. Finally, disruption
to some imported inputs caused by AD shock deters firm’s sales revenue. Our paper provides
a more complete and comprehensive picture of AD consequences and has important
ramifications for trade policy choice and design.
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