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Review of Quantitative Finance and Accounting
Published in: Review of Quantitative Finance and Accounting 3/2019

02-05-2018 | Original Research

Do antidumping measures affect Chinese export-related firms?

Authors: Xiuping Hua, Ying Jiang, Qian Sun, Xinyi Xing

Published in: Review of Quantitative Finance and Accounting | Issue 3/2019

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Abstract

We examine how the US and EU antidumping (AD) cases against Chinese firms affected their stock prices and long-term financial performance during 1995–2012, and whether the affected Chinese firms received more or less government subsidies in the subsequent years. Our findings indicate that AD news, especially the final decision on imposing antidumping measures, has significantly negative effects on the stock price of relevant Chinese export-related firms. There is also some limited evidence that the AD affected firms perform worse than their matched peers in terms of profitability. However, little empirical evidence reveals an increase in government subsidies given to AD affected firms after the imposition of AD duties, but we find a decrease in subsidies for non-SOEs.
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Footnotes
2
For the past 10 years, exporting is about 25% of China’s GDP on average.
 
3
Section 3 provides a literature review.
 
4
Firms in the US can also file a countervailing duty petition if they think imported goods are subsidized by the foreign government. The procedure is similar to that of AD cases. However, the countervailing duty was considered not applicable to non-market economies before 2007. There have been about 20 countervailing cases against China since 2007.
 
5
Quantitative measures such as voluntary export restrictions (VER) can benefit both protection seekers and foreign exporters due to the price hike resulting from the VER (De Melo and Tarr 1992).
 
6
There are some slight discrepancies between WTO and GAD statistics. WTO statistics only provide general information regarding the number of AD cases without providing concrete data for each AD case. Therefore, we obtain all our AD cases from GAD in our subsequent tests. GAD data are also frequently used in the recent studies.
 
7
Many cases only affected non-listed companies.
 
8
If a firm is involved in two AD cases, then it will be counted twice or as two firms. Unless otherwise mentioned, this method of counting is used throughout the paper.
 
9
For details please refer to Brown and Warner (1985) and Moeller et al. (2004).
 
10
We have randomly checked a few cases and found the AD news often appeared in Chinese news media or company websites 1 or 2 days after their release in the EU or US.
 
11
For both EU and US cases, only less than 2% of firms have received more than one AD sanction in the past 3 years.
 
12
For example, if Euro increases from 7 RMB to 8 RMB, CAR (0, 1) should decrease 0.7% less.
 
13
Some firms are included in the matched sample for several AD events. If a firm is included in the matched sample for two events, we will count them as two firms. The same holds for the AD affected firms.
 
14
For firms sanctioned in 2011 and 2012, we have fewer than 3 years of post-sanction data. Some firms also have fewer than 3 years before investigation data.
 
15
If we do not demean all variables, then we cannot control for the firm specific fixed effect as it will lead to perfect multicullinarity with the SOE dummy. We have also done the robustness check by using panel data without SOE dummy, but with firm-specific fixed effect (i.e., the level data without demeaning all the variables). The results are qualitatively similar to the results using demeaned panel data. Results are available upon request.
 
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Metadata
Title
Do antidumping measures affect Chinese export-related firms?
Authors
Xiuping Hua
Ying Jiang
Qian Sun
Xinyi Xing
Publication date
02-05-2018
Publisher
Springer US
Published in
Review of Quantitative Finance and Accounting / Issue 3/2019
Print ISSN: 0924-865X
Electronic ISSN: 1573-7179
DOI
https://doi.org/10.1007/s11156-018-0729-2

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