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Global Economy Journal

The Official Publication of the International Trade and Finance Association

Ed. by Pelzman, Joseph


CiteScore 2018: 0.33

SCImago Journal Rank (SJR) 2018: 0.157
Source Normalized Impact per Paper (SNIP) 2018: 0.402

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Volume 17, Issue 4

Issues

The Anatomy of Trade Deflection

Veysel Avsar
Published Online: 2017-08-30 | DOI: https://doi.org/10.1515/gej-2017-0050

Abstract

This study employs four-dimensional (firm-product-destination-year) export data of Brazilian firms to analyze firm-level responses when faced with an antidumping protection in a particular export market. We examine the extent to which firms shift their exports to other destinations in response to the antidumping duties. Our findings suggest that trade deflection depends on past export status in export markets. Firms deflect trade but only to destinations where they already have an established trading relationship. This prior relationship is important both for the intensive as well as for the extensive margin of trade alternative destinations. In addition to making sense of existing puzzles in trade deflection, this paper makes an important contribution by demonstrating how much the fixed costs of developing an export destination matter in terms of trade deflection.

Keywords: antidumping; trade deflection; WTO; intensive margin; extensive margin; firm-level export data

JEL Classification: F10; F13; O54; C23

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About the article

Published Online: 2017-08-30


Citation Information: Global Economy Journal, Volume 17, Issue 4, 20170050, ISSN (Online) 1553-5304, DOI: https://doi.org/10.1515/gej-2017-0050.

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