The Direct Investment Effects Of Antidumping

With the acceleration of economic globalization since World War II particular after the 1990s,the world multi-polarization continue to strengthen,economic competition between developed and developing countries becoming increasingly fierce,trade friction between the countries tend to frequently which lead to trade protectionism rise.With tariffs declining,anti-dumping becomes Governments discretionary prominent trade protection measure to maintenance the trade fair measures due to its legitimacy and easy to use.With China's economic being in upgrading and transformation,export competition extend from market share to core technology,and the uncertainty development of the world economy led to the return of industrial policy in Europe and the United States,Market Competition between developed countries and China in the manufacturing sector will be Intensifying.Emerging market countries,relying on export-oriented development strategy,are going through economic recession and serious inflation that will intensifying compete with China as export structure determined by factor endowments is similarity with China.China has been experiencing severe trade frictions not only in labor-intensive products but also in the capital-intensive,technology-intensive products in the world today.Once antidumping accusation against China is accepted,the probability of imposing antidumping measure and the rate of antidumping duty will be much higher than other countries,and Chinese firms have been excluded from the market of the host country for a long time because of antidumping.Since entering the WTO,the flows of china's OFDI increase sharply.OFDI motivtons diverse are diverse,but the scale of investment in order to avoid trade barriers is constantly expanding.This paper studied how anti-dumping induce China's OFDI to test whether Chinese firms have the ability to avoid antidumping thro-ugh OFDI.This paper not only can contribute Chinese firms to reduce the damage of anti-dumping but also can transform China's foreign trade groAwth mo-de and keep sustainable economic growth,and promote mutually beneficial and win-win strategy of opening up,and promote global division status.By using Stackelberg and Bertrand oligopoly model,this paper study how Chinese enterprise with different competitive advantages choose between exports and OFDI respond to anti-dumping measures initiated by host country.Panel model and G-MM model and DID model are used to make empirical analysis.Theoretical conclusion is that when Chinese enterprises have competitive advantage to invest the host country,enterprise's behavior is:If enterprise investment cost is less than free trade critical cost,the enterprise will invest the host country,profit in investment is higher than that export in free trade.If enterprise investment cost is greater than the cost of free trade under the condition of critical value,but is less than the anti-dumping duty cost under the condition of critical values.Enterprises will export under free trade and invest under antidumping duties,China's domestic welfare effect under investment will be lower than free trade.If enterprise investment cost is greater than the critical cost of anti-dumping duties,enterprise will choose export Regardless of in free trade or in anti-dumping cases,profit under free trade will be higher than antidumping duties.When Chinese enterprises have not competitive advantage so that can't invest in host country but can invest in third country,enterprise's behavior is:If the firm's investment cost is higher than critical cost of antidumping duties but less than critical cost of free trade,the firm prefers to export under free trade and invest in third countries under antidumping duties,and Profits under free trade will be higher than others.If the firm critical cost under investment in the third countries is less than under investment in the host country,Chinese firm will produce in the third countries and then export to the host country;if not,the firm will produce in the host country.Empirical conclusion is that(1)Those countries imposed antidumping measures will significantly trigger China capital outflow compare those didn't.(2)Host countries'anti-dumping measures can significantly induce china's capital outflow;(3)anti-dumping measures inducing China's capital outflow has time effect.Because the influence of anti-dumping is sustainable,China's capital outflows would significantly be induced by the 5?7 years earlier antidumping initiated by the host country;(4)The economic recession or trade imbalances of the host country can weaken anti-dumping jumping OFDI motivation,and the rising unemployment can strengthen anti-dumping jumping OFDI motivation;(5)EU imposed textile anti-dumping to China cause China to invest in Vietnam,Laos,Cambodia and Indonesia investment,the fact confirms that China can invest in third countries to avoid trade barrier when encountering antidumping.In recent years,the inflow of FDI in China has remained rapid growth,but labor-intensive textile industry FDI have been decreasing.Although the rising labor costs and RMB appreciation are the predominant reason,Export cost promoted by the anti-dumping and other trade barriers is also an important reason.This paper study how anti-dumping affect inward FDI can parse deep reason of FDI dynamically changing in the background of the evolving situation of China's international division of labor status,and is significance to enhance the quality of foreign investment and optimize the utilization of foreign investment.This paper found that:the formation of China's international division is not only due to the structure of factor endowments,but also due to the multinational firms.Through setting up processing firms in China,multinational firms import intermediate products from home country and export final products to home country,this-will lead to a huge trade deficit between China and their home countries and increase the probability of initiating antidumping to China.In addition,labor-intensive industries in developed countries are forced to be transferred to China because of their high wages and will enlarge the trade deficit between China and home countries;this will also lead to increase probability of initiating antidumping to China.Once China is imposed anti-dumping measure,the foreign firm in China will be forced to transfer investment to the third country which is not subjected to anti-dumping duties because of increasing export costs.The empirical study found that the inflow of labor-intensive industry FDI is negative with China industries' anti-dumping measures initiated by other countries.