The chilling effects of unsuccessful antidumping investigations on firm export dynamics

This paper studies the aftermath of “unsuccessful” antidumping investigations that failed to achieve positive antidumping findings or antidumping duties against foreign exporters. While failed investigations might be viewed as benign, “unsuccessful” investigations may nonetheless elevate trade policy uncertainty since investigated products face dramatically increased probabilities of future antidumping investigations. Our analysis of Chinese firm export dynamics following “unsuccessful” U.S. antidumping investigations between 2000 and 2015 uncovers strong reductions in firm export dynamics - counts of new export entry and incumbent exit in “unsuccessfully” investigated products are both diminished by U.S. antidumping investigations. The combined effects of these responses lead to drops in the number of active exporters, and declines in export values for the investigated products. Since recent work on firm export dynamics shows how extensive margin changes facilitate improvements in export firm productivity and the product quality enjoyed by consumers, a benign view of “unsuccessful” antidumping investigations is called into question. • Even in the absence of anti-dumping duty penalties, the process of anti-dumping investigations diminishes Chinese export entry and exit. • Firm export reactions can be explained by trade policy uncertainty, since even unsuccessful investigations raise the risk of reinvestigation. • The trade reductions that follow from “unsuccessful” anti-dumping investigations, which don't culminate in duties, are comparable in economic magnitude to the trade reductions caused by the imposition of anti-dumping duties.