Antidumping and tariff jumping: Japanese firms' DFI in the European Union and the United States

Antidumping and Tariff Jumping: Japanese Firms' DFI in the European Union and the United States. - The relationship between EU and US antidumping measures and direct foreign investment (DFI) is examined through a micro-econometrical analysis of Japanese firms' plant establishments in the electronics industry. After controlling for firm and industry capabilities, market size, transport cost, and product cycle effects, antidumping actions are found to have a substantial positive effect on Japanese DFI. EU antidumping is roughly twice as likely to lead to tariff-jumping DFI as US antidumping, which is ascribed to marked differences in antidumping procedures. Tariff jumping makes antidumping ineffective in combatting anticompetitive behaviour by foreign firms and may result in increased market concentration.