Foreign Direct Investment and Antidumping Policy

• Main Authors: WU, HSIU-YUAN, 吳修沅
• Other Authors: Chen Chin-Sheng
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/88z788

碩士 === 東吳大學 === 國際經營與貿易學系 === 106 === With the liberalization of international trade, it is easier for manufacturers to move across borders. At the same time, governments in many countries have adopted relevant trade protection policies to protect domestic industries from damages caused by unfair foreign competition. Therefore, the impacts of trade protection policies and foreign direct investments are important issues in the field of international trade. This paper aims to construct a three-country model to analyze the relationship between domestic firm’s FDI decisions and anti-dumping policies. In the model, domestic firm can use either export or FDI to enter the third-country market, while it enters the foreign market via export and faces the anti-dumping duties levied by the foreign government. We will discuss whether domestic firm uses FDI to enter the third-country market, whereby it can will avoid the anti-dumping duties and export its product to the foreign market. In addition to anti-dumping duties, we also consider the impact of price undertaking policies on the domestic firm’s entry mode. This paper also investigates the welfare effects of the entry mode for each country and all countries as a whole. This paper finds that the anti-dumping duties and the price undertaking will increase the incentives for the domestic firm to engage in FDI in the third country. However, the foreign government will lower anti-dumping duties to induce the domestic firm to choose exports. Finally, from the perspective of the global welfare, it could be more desirable for the domestic firm use export as an entry mode than direct investment.