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Schuknecht, Ludger
Stephan, Joerg
Year of Publication: 
Series/Report no.: 
Diskussionsbeiträge - Serie II No. 174
This paper argues that the anticipation of protection can have a stimulating effect on exports instead of the commonly claimed effect of harassment. If protection serves market cartellization by fixing export quantities or prices, exporters may have an incentive to increase their sales abroad in order to secure a large share of the expected rent, which is brought about by the anticipated import restriction. This may even result in sales below marginal costs or dumping. The effect of the rotectionist threat may then be the reverse of what is intended: it can raise the speed of import penetration and it can provoke dumping. A formal model and a supportive institutional analysis of EC trade protection is supplemented by preliminary empirical evidence.
Document Type: 
Working Paper

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