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Firm Dynamics in Response to Antidumping Duties: Firm-level evidence from Japan

Nobu Yamashita of RMIT and Isamu Yamauchi of Meiji University

In this proposed study we empirically answer a question of what are the firm dynamics in response to the negative shocks generated by antidumping duties imposed in the major export markets. We trace the evolution of firm dynamics in a panel of Japanese firms through the lenses of innovation, productivity and profitability in order to gain a fuller picture of the short and long-term adjustments of the targeted firm in antidumping duties. Antidumping duties are duties levied on imported products considered to be sold at ‘less than fair value.’ These duties are intended in order to offset the potential injury to the domestic industry. While significant insights have been gained from the literature regarding the effects of antidumping measures on protected domestic firms and industries in the antidumping imposing country (Pierce, 2011), much less is known about the corresponding impacts on firm dynamics of exporters in the targeted foreign country. In this project, we attempt to fill this gap by assessing the influence of antidumping duties on the targeted Japanese firms. In particular, there is little evidence to trace how firm dynamics have changed due to the abrupt loss of the market share in the exporting market. To this end, our first objective is to construct the unique dataset by combining the Antidumping Database from the World Bank and the affected Japanese firms. The second is to systematically clarify the firm dynamics under the influence of antidumping duties. This research is funded by Economic Research Institute for ASEAN and East Asia (ERIA), Jakarta.