Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/339355 
Year of Publication: 
2026
Series/Report no.: 
CITP Working Paper No. 030
Publisher: 
Centre for Inclusive Trade Policy (CITP), University of Sussex Business School, Brighton
Abstract: 
Using Chinese firm-level trade data combined with global anti-dumping (AD) and countervailing duty (CVD) investigations, we uncover a previously overlooked cost of industrial policy under WTO agreements. At every stage of AD/CVD investigation, subsidies significantly raise the probability of affirmative rulings and lead to higher imposed duties. Firms that received larger subsidies are also less likely to be granted firm-specific duties, which are lower than the product-level duties applied to all other firms exporting the investigated product. While AD/CVD duties create a moderate trade barrier that an average Chinese firm expects to face, they represent a significant cost of subsidy for those heavily subsidized and those potentially receiving firm-specific duties. The intended benefits of industrial subsidies are partially offset by increased foreign trade protection: AD/CVD duties induced by subsidies reduced the subsidy effect on firm revenue growth by 22%.
Subjects: 
Industrial Policy
Subsidies
Anti-dumping and Countervailing Duties
JEL: 
F13
L52
O25
Document Type: 
Working Paper

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