Determinants of Anti-dumping Petition in the Chemical and Pharmaceutical Sectors in India

Abstract

The study examines the factors that drive a firm to seek protection against unfair trade practices through anti-dumping (AD) mechanisms. By focusing on AD cases initiated in the chemical and pharmaceutical allied sectors, taken from the Directorate General of Trade Remedies (DGTR) website, we have identified 45 petitioners. The empirical strategy involves the construction of an unbalanced panel from 1995 to 2019, consisting of various firm-level and industrial-level characteristics such as GDP growth rate, firm age, firm size, profitability, research and development (R&D) intensity, export intensity and market concentration. We have also examined the firm’s past experience with AD activities and its impact on its probability of filing a new AD petition. The econometric analysis uses the binary choice Probit model (random effects). The findings reveal that firms during lower economic activities are more likely to file AD petitions. Lesser concentrated markets are more likely to seek AD protection. In addition to this, firms experiencing a decline in their profit margins have a higher likelihood of filing AD petitions. Notably, large firms are found to exhibit a greater likelihood of filing AD petitions. Lastly, the econometric findings suggest that firms in high R&D-intensive industries, such as the pharmaceutical sectors, are less likely to seek protectionist measures.

JEL Codes: C33, F13, F14, L11, L21, L22, Y10

Keywords

Anti-dumping pharmaceutical sector exports research and development intensity market concentration GDP growth

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